What are the credit effects if I go for deed in lieu?

As I said I am not behing of the payment. Should I stop to make any payment so the short sale will be taking into consideration? The length of the process is from 30 to 90 days.
I am aware now that in order to do a short sale there should be an offer, what happen if there is no offer, what would the bank do? Do you think the will give me a hard time for a short sale?
If the offer is too low that the value market of the house, will the bank accept it?
Thank you

Welcome Titine.

You should not stop payments. At least I cannot advise you to stop payments. If you cannot afford the monthly payments then inform your Mortgage Company and then sell out you property and pay off them. Is it a recourse loan or non recourse loan loan? Check it in your loan documents.

stopping payments will really hurt your credit score, this will affect any future loans that you will want to take out. You should consider what Niiccs has suggested, selling the property and paying off the lender.

Thank you for your reply, but you did not answer all my questions. The issue is that it is not easy to sell the house. If I am going to sell my house it will be less (very low) than the debt I have 60K minimum. That's why I would like to go to a short sale not only I could not afford anymore for any payment but I will loose a lot of money. Please advise and reply to the others questions. Thank you for your time

hi titine,

welcome back.

i understand your point of view here. i think you have a mortgage on the house and if you do a short sale, certainly you're losing out good money, as you said some $60,000. what i suggest is, since the house is too big for you and your kids, why not use it to generate some income for you. it could also help you in the mortgage payments as well. why not offer a part f it for rent and use the rental income for you loan payment. does that sound ok to you?

regarding the short sale, i hope you're aware of the deficiency payments, which your lender may ask for if you don't stay in an anti-deficiency state. moreover, the anti-deficiency laws are applicable only in case of purchase mortgages. so, did you take out the mortgage to purchase the home or is the current loan a refinance loan?

thanks

Thank you James,
I wish I could sell the house, pay off the Bank, and rent it with someone (the area where I am is not easy to rent for those spanish people there is no transportation). Those suggestions look not possible to me otherwise I have done it long time ago.
There are some big word that i don't understand but let me explain to you all my problems. I did refinance to Indymac Bank.
I have 420K as mortgage, and right now the value of the house is 340K. (maybe this is the deficiency you are talking about) if yes how the process will be with the bank.
I am divorced and could not afford to pay anymore the monthly payment for the mortgage which all my salary goes to it. That's why I am planning to do a short sale. Hence, if I understand clearly a short sale requires a buyer right? What happend if I don't have a buyer? or anybody will buy my house? It will go to forcloresure correct?
Regarding the foreclosure
I think it will go to the court and if it's going to the court do I have to pay :
something to the Indymac bank?
something to the court?
Will the bank will be behind me all the time?
Grateful if you could help me, your advises are very vital to me.
Thank you all

Thank you Niicss, much appreciated.
As you are aware, Indymac is under investigation and I was told that the bank won't do any forclosure on mortgages but will try to work with borrowers. This is insane I could not afford to pay anymore. Started this month I did not pay. I tried to call them but no one answer at the Lost mitigation Department. What should I do? Should I just let it go as it is? Please help. I wanted to do the deed in lieu because I could not find any buyers. What should I do please help.
Thank you

hi titine.

welcome back.

you should keep trying and calling them. there are so many clients for them who are in same situation or may be in worse condition. so keep calling the loss mitigation department or mail them and let them know that you are willing to go for deed in lieu of foreclosure.

feel free to ask if you have any further questions.

best of luck.
larry

Thank you very much Larry for your advices. You all are the best

You can qualify for a new loan after 3 years of a foreclosure and 2 years after a bankruptcy for a FHA loan.

Hello, my husband has gotten laid off the end of sept. Ive been able to make the mprtgae payment until this last month. I just cant do it. with all the other debt we are just falling more behind. We owe 52,000 more than the house is worth. In oreder to get a payment that we can afford they would need to drop over 50,000 $ off the mortgage and drop intrest rate by aleast 2.5% what do I do? I have found a place to live that the rent is half of mortgage payment.

what about a deed in lieu of foreclser? would this be a good option for me?

Hi Kaylee,

Yes, a deed-in-lieu foreclosure will be a good option. The lender will take away the property and sell it off in the market to recover the debts. In case, if there is a deficient amount, the lender will forgive it in most cases. However, you will have to remember that, a deed-in-lieu foreclosure will affect your credit by around 200 points. Moreover, you will have to apply for a deed-in-lieu to the lender. It is his discretion whether he will accept it or not.

Thanks,

Jerry

hi. ive been reading quite a few situations on here about the DIL. but for mine ive been divorced and struggling and looking at bankruptcy now and i want to give up my house for the main reason cant afford the high payments anymore and want to move out within 2 mos into a rental. i was put into a modification agreement 5 mos ago but that isnt helping me either. now im behind in that about a month and a half and i just want to let this mort go and was going to just let it foreclose. and i dont like the option one/AHMSI my mort co. cuz i dont think they re-fi'd my house fairly 2 1/2 yrs ago but i stuck with it all this time cuz i had to. im a single mom now w 2 kids. but im trying to make a fresh start and dont want the burden of this house or mort co. anymore like noww....so a family member mentioned about the DIL and said that would be a better option for me, a lesser of the two evils, versus foreclosure. plus i did try to sell my property since may 2008 but ive lost buyers in the process due to a $7000 lien that was placed on the property from my ex-hus when the title co. at the time of my refi did not take him off the deed when they were supposed to as requested. and the lien stopped the agreement of sales that came thru. i just recently got the lien released two weeks ago but now the house isnt selling due to timing of the weather, economy and just bad timing all together. so needless to say i've "run out of gas" and like i said need to move on cuz i cant afford the mort payments, dont trust this mort. co. and need a fresh start. so would a DIL be sufficient for me instead of foreclosure and do i need a professional to handle it or can i handle it on my own? what r some important points do i need to know to handle this situation cuz trust me ive been "screwed enough" financially and just can't afford to anymore if i can have control over it. thanks....