Posted on: 07th Apr, 2010 12:56 pm
With all ramifications considered [ taxes , judgements and credit ] which is the better option . I live in Ca. and have PMI also. The loan is with BofA and the PMI is through Old Republic [RIMC]
Hi hondo,
Both deed in lieu and short sale are good options to get rid of the property if your mortgage is underwater. If you want to save your credit, then you should go for short sale. In this process, you will be able to sell off the property but you would be liable for the deficient balance resulting from the sale. However, you score would go down by only 80-100 points.
In case of a deed in lieu of foreclosure, your score would go down by 250 points. But you won't be liable for the deficient balance resulting from the sale of the property. This forgiven amount will be considered as your income by the IRS but depending upon the Mortgage Debt Forgiveness Act, you may not have to pay the taxes.
Both deed in lieu and short sale are good options to get rid of the property if your mortgage is underwater. If you want to save your credit, then you should go for short sale. In this process, you will be able to sell off the property but you would be liable for the deficient balance resulting from the sale. However, you score would go down by only 80-100 points.
In case of a deed in lieu of foreclosure, your score would go down by 250 points. But you won't be liable for the deficient balance resulting from the sale of the property. This forgiven amount will be considered as your income by the IRS but depending upon the Mortgage Debt Forgiveness Act, you may not have to pay the taxes.