Posted on: 09th Mar, 2009 02:36 pm
I have two investment properties, both 90 day in default with lender. I have been operating from an LLC (don't know if that matters) but the properties were financed using my personal information. One property is willing to do deed in lieu of. I have only one mortgate on the house. The other house is not offering a deed in lieu of and will probably go to full foreclosure.
What is the exact differences on credit situation between these two options and what are the exact differences in future financial remifications?
One of the lender reps said there was no difference. Does it matter from a credit standpoint if the other property forecloses?
Thank you for any advice
What is the exact differences on credit situation between these two options and what are the exact differences in future financial remifications?
One of the lender reps said there was no difference. Does it matter from a credit standpoint if the other property forecloses?
Thank you for any advice
Hi AJ,
The lender representative has said it right. There isn't much of a difference in foreclosure and deed-in-lieu from credit point of view. A deed in lieu will lower your credit by as much as 250 points and will reflect on your credit report for about 7 years. A foreclosure affects the credit almost in the same way. However, if you can negotiate with the lender for a short sale that can be less damaging to your credit, dropping it down by 75-100 points.
Thanks,
Jerry
The lender representative has said it right. There isn't much of a difference in foreclosure and deed-in-lieu from credit point of view. A deed in lieu will lower your credit by as much as 250 points and will reflect on your credit report for about 7 years. A foreclosure affects the credit almost in the same way. However, if you can negotiate with the lender for a short sale that can be less damaging to your credit, dropping it down by 75-100 points.
Thanks,
Jerry