Posted on: 13th Jan, 2009 02:21 pm
Want to know which directin we should go. Thanks.
Hi xwildcat!
Welcome to forums!
In case of a deed in lieu foreclosure, the deficient amount resulting from the sale of the property is forgiven by the lender. Thus, the lender will not ask you to pay the deficient amount. Moreover, Arizona is an anti deficiency state. Here the lenders will not be able to sue the borrowers for the deficient amount resulting from a short sale or a foreclosure even.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
In case of a deed in lieu foreclosure, the deficient amount resulting from the sale of the property is forgiven by the lender. Thus, the lender will not ask you to pay the deficient amount. Moreover, Arizona is an anti deficiency state. Here the lenders will not be able to sue the borrowers for the deficient amount resulting from a short sale or a foreclosure even.
Feel free to ask if you have further queries.
Sussane
I wonder if there is an advantage or disadvantage to which method an owner in default persues to get rid of property they cannot afford. Our mortgage company tripled our mortgage payment after two years. There is no way we could afford to continue making payments. Now I am told that we will have to pay taxes on any amount of the mortgage not collected in a short sale, foreclosure or deed in lieu. Our property is a condo in Phoenix, AZ. Will we have to claim any defeciency in the sale price as regular income?
Hi Linda,
In a short sale and deed in lieu, the lender sells off the property in order to recover his debts. The deficient amount resulting from the sale of the property is forgiven in a deed in lieu and the borrowers have to pay taxes on the forgiven amount. In a short sale, the deficient amount is not forgiven by the lender. The borrower needs to pay that and no taxes are charged on it.
As far as foreclosure is concerned, the lender sells off the property and the deficient amount resulting from the sale is required to be paid by the borrower. If the borrower does not pay the deficient amount, the lender can place liens on his other properties or can garnish his wages.
As far as credit is concerned, a deed in lieu or a foreclosure will lower the borrower's credit score by 250 points. In case of a short sale, credit score will be lowered by 75-100 points. So if you want to save your credit, short sale is the best option for you.
Thanks
In a short sale and deed in lieu, the lender sells off the property in order to recover his debts. The deficient amount resulting from the sale of the property is forgiven in a deed in lieu and the borrowers have to pay taxes on the forgiven amount. In a short sale, the deficient amount is not forgiven by the lender. The borrower needs to pay that and no taxes are charged on it.
As far as foreclosure is concerned, the lender sells off the property and the deficient amount resulting from the sale is required to be paid by the borrower. If the borrower does not pay the deficient amount, the lender can place liens on his other properties or can garnish his wages.
As far as credit is concerned, a deed in lieu or a foreclosure will lower the borrower's credit score by 250 points. In case of a short sale, credit score will be lowered by 75-100 points. So if you want to save your credit, short sale is the best option for you.
Thanks
does claiming bankruptcy supersede a foreclosure? I'm reading that if your goal is to obtain a mortgage in the future, its better off to do a BK rather than a foreclosure. However, if you are going to foreclose first and then do the BK, does one supersede the other?
Hi Raimond,
If your property is foreclosed first and then you file bankruptcy, both will effect your credit score. A foreclosure will lower your credit score by 250 points whereas a bankruptcy will lower your credit score by another 200-250 points.
So it is always better to discuss your options with the lender before letting the property go into foreclosure.
Thanks
If your property is foreclosed first and then you file bankruptcy, both will effect your credit score. A foreclosure will lower your credit score by 250 points whereas a bankruptcy will lower your credit score by another 200-250 points.
So it is always better to discuss your options with the lender before letting the property go into foreclosure.
Thanks