Posted on: 10th May, 2006 01:22pm
If you're not able to pay your mortgage and you can't sell the home or get a work out plan, a deed in lieu of foreclosure is your third option. This option allows you to transfer the property to your lender in exchange for being released from your mortgage.
Does deed in lieu of foreclosure affect credit score?
When you go for deed in lieu of foreclosure, it affects your credit score. Your score will drop by 250 points or so and will stay on your credit report for 7 years. After 7 years, you can have the deed in lieu removed from your credit report and start to rebuild your credit. At the end of the 7th year, you can request the bureaus to remove it from the report.
How long after deed in lieu can you buy home?
Because a deed in lieu has a negative impact on your credit, lenders won't offer you a mortgage for the first 2-3 years. In the meantime, if you try and rebuild your credit the chances are that you may be approved for a loan after the 2-3 years has expired. After that you can buy a new home.
Related Forum Discussions:
my wife and i along w/another couple bought a 2 family with an agreement that one resident would buy the property in one year, he defaulted and left us with a ton of damage and bills. long story short we ended up doing a deed in lieu on the property. our wives were the primary lendees on the mortgage as a result we are seeing a major hit on her credit score taking it down to a 660 or so. lenders can't use her on a loan if we want to refinance or anything because they say the hit disqualifies her. we did not enter this deal to go into the hole, we worked real hard for many years to keep our credit very very good and this one property seems to have wrecked us, we don't have a ton of money, we work hard and have a small home of our own that we would like to refinance, i am getting no's from lenders. i really need some help and i feel hopeless at this point. i just don't want to see all that my wife and i are working for shot because of one bad deal that we only entered into because one tenant wanted to buy the place and take care of it and then we got stuck with it. it took thousands out of our pockets before the deed in lieu. as i said other than that we have had excellent credit, mine is over 740-750. please offer any advice, it is truly truly appeciated. i feel that we are good hard working people and we just don't want to feel hopeless.thank you so much, matt long
hi bobby!
welcome to forums!
if your wife's name is not mentioned in that rental property and the mortgage, then the deed in lieu of foreclosure will not affect her credit.
you will have to inform the lender about your plans and he will guide you as to what steps you need to take.
feel free to ask if you have further queries.
sussane
welcome to forums!
if your wife's name is not mentioned in that rental property and the mortgage, then the deed in lieu of foreclosure will not affect her credit.
you will have to inform the lender about your plans and he will guide you as to what steps you need to take.
feel free to ask if you have further queries.
sussane
what are the time be for foreclosure,,,in texas,,wells fargo???
Hi cl!
Welcome to forums!
Keeping in mind the timing of the various required notices, it usually takes approximately 60 days to complete an uncontested non-judicial foreclosure.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Keeping in mind the timing of the various required notices, it usually takes approximately 60 days to complete an uncontested non-judicial foreclosure.
Feel free to ask if you've further queries.
Sussane
I recently applied for with my mortgage company to do a short sale. I have a buyer who is currently living in my house. they have been paying rent now for 2 months and really love the house. The loan company has drug their feet on giving my realtor the ok to do the short sale. I am very concerned that i will end up losing these excellent buyers if they dont get an answer soon. is their anything i can do to speed up the short sale process. We even got the buyer to kick in $2000.00 more....would appreciate any help you could give me. :?:
Hi sjstoy,
You should have to be in constant touch with the lender and try to convince him to give his permission for a short sale asap. Apart from that, I don't think there is anything else that you can do.
Thanks,
Jerry
You should have to be in constant touch with the lender and try to convince him to give his permission for a short sale asap. Apart from that, I don't think there is anything else that you can do.
Thanks,
Jerry
I went through chap 7 bankruptcy in 2008.We opted to keep the house out of the the bankruptcy. I never missed a payment on the house, and the bank never reafirmed the home loan. After paying the loan for the next 3 months after the discharge, we decided to walk away, leaving the home as part of the bankruptcy because it was never reafirmed.
It is now 3 1/2 years later and we are trying to qualify for an FHA loan. County records still have me listed as the owner of the house as per florida law. In order to have my name removed from the records the house has to forclouse. Chase is involved in robo signing,and after 3 years of trying to forclouse on the home, the entire prosses was halted and not restartedas yet. In order to remove my name from the county records, i requested the deed in lieu of forclouser option. it has not been completed as yet, and i beleive it can be canceled.
Will this deed in liew of forclosure remove my name and put the house in their name on the county records since the bank will have the deeded ownership of the home?
Also will my credit score be affected with the D.I.L.F. My credit score dropped to 696 after the bankruptcy from 725.I never missed a payment on the loan from 2005 when purchased untill we walked away.the are no negitive reports at all on the loan other then listing it as beeing included in the bankruptcy. :?:
It is now 3 1/2 years later and we are trying to qualify for an FHA loan. County records still have me listed as the owner of the house as per florida law. In order to have my name removed from the records the house has to forclouse. Chase is involved in robo signing,and after 3 years of trying to forclouse on the home, the entire prosses was halted and not restartedas yet. In order to remove my name from the county records, i requested the deed in lieu of forclouser option. it has not been completed as yet, and i beleive it can be canceled.
Will this deed in liew of forclosure remove my name and put the house in their name on the county records since the bank will have the deeded ownership of the home?
Also will my credit score be affected with the D.I.L.F. My credit score dropped to 696 after the bankruptcy from 725.I never missed a payment on the loan from 2005 when purchased untill we walked away.the are no negitive reports at all on the loan other then listing it as beeing included in the bankruptcy. :?:
I entered a deed in lieu with my mortgage service company back in 2010 and the govt forgave the debt last year, sending me the info for my taxes. However, the mortgage amount is still showing up as part of my debt ratio. Is that more of a negative affect than having the deed in lieu on my report? I know you say my credit score will drop 250 pts but the debt ratio is so high I'm not sure that's much worse.
Hi Vickie,
If the deed in lieu of foreclosure is complete and if the deficient balance has been forgiven by the lender, then it shouldn't be calculated as a part of your debt ratio.
Thanks
If the deed in lieu of foreclosure is complete and if the deficient balance has been forgiven by the lender, then it shouldn't be calculated as a part of your debt ratio.
Thanks
Three yrs ago, we did a DIL. It took frm Jan-May 2009. Now, we find that Regions bank has listed us as delinquent for six months, from Jan to July. #1: HOW CAN THEY LIST US AS DELINQUENT DURING DIL PROCESS DONE WITH ATTY & BANK . THEY TOOK THE KEYS BACK IN MAY AND ARE LISTING US AS DELINQUENT FOR JUNE,JULY WHEN WE DIDN'T EVEN OWN THE CONDO? THE BANK OWNED IT.
#2 HOW CAN WE GET THESE SIX MONTHS DELINQUENT OFF OUR CREDIT SCORE? ALSO, WITH CREDIT SCORE OF 703, CAN WE STILL REFI WITH THE BAD DEBT ON OUR CREDIT SCORES?
#2 HOW CAN WE GET THESE SIX MONTHS DELINQUENT OFF OUR CREDIT SCORE? ALSO, WITH CREDIT SCORE OF 703, CAN WE STILL REFI WITH THE BAD DEBT ON OUR CREDIT SCORES?
Hi ABBYSHERLOCK,
Your query has been replied to in the given page: http://www.mortgagefit.com/Rebuilding-credit/How-dO-I-get-delinquent-payments-removed-from-credit-score.html
Take a look at it. I hope it will help you.
Your query has been replied to in the given page: http://www.mortgagefit.com/Rebuilding-credit/How-dO-I-get-delinquent-payments-removed-from-credit-score.html
Take a look at it. I hope it will help you.
I'm considering a deed in lieu - I have a VA loan, my home since purchase has plunged 80K and at 57 years old, will never recoup my loss - I have no equity in the house and wanting to relocate, as well, thinking retirement in the next 5 to 7 years - what to do????
hi tom,
if you're already delinquent on your mortgage payments, then you can contact your lender and apply for a deed in lieu of foreclosure. the lender will check your financial situation and let you know whether or not you will qualify for it.
if you're already delinquent on your mortgage payments, then you can contact your lender and apply for a deed in lieu of foreclosure. the lender will check your financial situation and let you know whether or not you will qualify for it.
We have to deed in lieu our house due to relocation. We want to get another house instead of renting. We have a cosigner with excellent credit. AIs this possiable??