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

Hi maryanne,

As there is no lien on the property, you can check with the lender if he can offer you a deed in lieu foreclosure. It will be totally the lender's discretion whether he will accept a deed in lieu or not. In the process of deed in lieu, you will have to give away the property to the lender who will try to sell the property in the market. By selling it, the lender will try to recover the debts. There are chances that the house will be sold at a low price due to the market situation. So there will be a deficient amount which the lender will forgive. But you will have to pay taxes on the deficient amount as the tax department will consider this as your income. To know more about deed in lieu, check out the following link:
http://www.mortgagefit.com/deed-lieu.html

Thanks,

Jerry

I am not sure anyone truly knows the real deal, I hear different info from one person to the next (talking experts here not normal joe), My house has been on the market for almost 2 years. Obama makes some nice stuff for some of us to save our homes, yea... but before I can finish the paperwork, I lose my job, been 8 weeks now with no income, so here we go, I work my entire life to obtain what little I have, turned 61 (I am my only source of income) no job, now losing my home, once that happens I cant even rent an apartment with bad credit (I will go from excellent credit to bad credit almost overnight) the apartments (not talking really nice here) just a safe area average 1,000 a month). How Nice you work your entire life to end up on the streets. What a country.. :cry: :evil: :shock:

Hi Kathy,

I can understand that you are going through a tough situation.

I guess you are facing foreclosure. As you don't want to ruin your good credit, I would suggest you to speak to the lender about forbearance. In this process, the lender will either reduce or suspend your payments depending upon your situation for few months. Once you recover from your financial crisis, the lender will give you a new repayment plan. To know more about forbearance, check out the following link:
http://www.mortgagefit.com/forbearance.html

actually, we are in workout with our lender for a deed in lieu of foreclosure and one of the qualifications is that the home has been listed for at least 90 days. we had to send the listing aggreement for proof as well as our income/expense report. if you have a second mortgage on the property, make sure lender is looking at both simultaneously.

my husband and i own a condo that we want out of. we have lived there for 3 1/2 years, always paid on time. we have asked for a qualify for a modification for our lender denied and we have been turned down by other financial institutions for refinance because we are so upside down. my husband needs to retire for medical reasons and we can't afford to keep the house if he retires. we tried to sell but homeowners are involved in litigation with the builder for defective building so obviously no takers. this has devalued the home even more. we want to simply walk away and let foreclosure happen as it will. can we just move out or do we have to notify the lender of our intent. they have refused to work with us on anything and we are tired of trying.

you can initiate process of Deed in lieu with your lender.

Prepare a hardship letter & contact your lender

I own two property, my pimary property has a large payment which i can know longer afford. My rental has a mortgage also of which i have lost the income for the last 4 months. My health is not good. My primary house is large and has a basement. My health is issue is that I cant walk but about 40 to 50 feet without resting. The lost income on my rental property has sent my financial situation in a world wind and can no longer afford the 1300.00 payment Can I do a deed in lieu or a forecloser and move to my rental property, which is more affordable, without them coming after it also

Hi bobby!

Welcome to forums!

You can definitely apply for a deed in lieu of foreclosure in order to sell off the primary property. Once the property is sold off, you won't be responsible for the balance amount as it would be forgiven by the lender. Then you can move to your rental property. However, you should note that it would affect your credit score and reduce it by 250 points.

Feel free to ask if you've further queries.

Sussane

Our home is not worth what we owe. My spouse wants to do shortsale he contact a realtor he came over got or info we have called him and never heard back my husband took his advice and now we are 2 months behind on our mortagage payment I bank is call he is not calling them I do not know what to do I work he does all the time because of weather I want formulate a plan that will not effect my credit so when we have paid off our other debts we would be able in 3 yrs to 4 yrs be able to buy or build our home. If spouse was work steadly we would be able to pay loan. The house needs improvements with new siding etc and there is no way we can get what we owe to the bank if we try to sell I do not want a shortsale is deed on
lieu a better options we have leaved in home for 10 yrs put lots of money into home and husband has lots of unfinish projects and I am tired of using my income and credit cards to buy materials and projects are not completed he is always to tired he works in the construction field believe it or not 2 yrs ago I owe no one and when we refinance with hsbc at my spouse recommendation we got screwed we had a low interest to a high interest and -6000 dollars for fees they said our loan with old lender would ballooned in a few weeks stupid me did not call lender just blindly follow spouse and hsbc lender refinanced with them and did no even get money to fix house just high interest when she promised it would have been less the 6% I feel so stupid what ever advice you can give me please do thank you

Hi Cece,

Your query has been replied to in the given page:
http://www.mortgagefit.com/problems/shortsale-defaultpayments.html#154795

Take a look at it. Hope it helps you.

Thanks

I lost my job but got another one. However, the new job is 4000 miles away. I took the new job and moved last year. My husband has not moved yet - he has been trying to sell our condo. We couldn't cover the mortgage and my rent, so we rented out the condo and my husband is living with friends. We have had the condo on the market for several months with no offers. We are current on our payments, but almost out of savings and have other debt (all of which is current). We would really like to live together some time soon - what are the odds we could get a short sale or deed-in-lieu approved, even if we are not in default?

Welcome KathyKY,

In my opinion, it would be a good option to apply for a deed in lieu of foreclosure. Though you haven't defaulted on your mortgage payments, you may apply for it because you have been relocated for your job. However, you should note that it would be completely your lender's discretion whether or not he would accept the request.

We bought a fixer upper with some property about 6 years ago. It is not our primary residence. We owe $85,000 and the last Realtor we talked to said it was only worth $40,000....our mortgage company said they would do a DIL and it would not negatively affect our credit at all. Is this true?

Hi Lizz!

Welcome to forums!

A deed in lieu of foreclosure will negatively affect your credit report and reduce your credit score by 250 points.

Sussane

Can I get a deed in leiu if my ex-husbands name is on the loan but he has quit claimed the property to me?