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

Welcome jillianna,

The person whose name is mentioned on the mortgage docs can apply for a deed in lieu of foreclosure. If your name is not mentioned on the property deed, then you won't be able to apply for a deed in lieu of foreclosure.

we just went deed in lieu we tryed to get a hardship had papers from my husbands droctor and all but our'er morgage holder benefical would not let us re- fiance or hardship even though we had things too back us up. what we wont to know is the goverment helping and giveing programs too help out displaced hard working people that could not help but to loose there home considering so many people have lost there homes due to similar circumstances, is there some program that the goverment is offering lost homeowners to help them own a home again? if not our'er goverment should help us out in our'er time of need.

Hi kathy!

Welcome to forums!

If you have already lost your home in a foreclosure sale, then there's hardly anything that can be done. If you're facing foreclosure and want to avoid it, then you can apply for a home affordable loan modification. This will not only help you in saving your property, but you will get better repayment plan to pay off the dues.

Feel free to ask if you've further queries.

Sussane

In general full foreclosure will take 2 years to recover from.that will be credit effect.

i have owned my home for 6 years, paid $95k, put $20k down, a year later obtained a home equity loan of $25k. moved for a job in sept of '07. house has been vaccant since i moved. i'm still current with my payments.
realator indicated property wouldn't sell for more than $55k, so i'm underwater some where between $30 - 35k. i'm not really worried about my credit situation...? what are my chances of working a dil when dealing with two lenders? if the dil won't work is there anyway to offer the 2nd lender a cash buy out of the equity loan? suggestions?? i don't feel that renting the home out is a option, as i live too far away and don't want the hassle of a landlord/tennant situation.

hi commandotom,

if you're facing severe hardship in paying off the mortgage, then you should contact the lender and apply for a deed in lieu of foreclosure. however, as there are two mortgages on your property, both the lenders have to agree to it. unless both of them agree, you won't be able to get a deed in lieu of foreclosure.

A deed in lieu of foreclosure is an agreement where you deed your property over to your lender in exchange for being forgiven all the remaining mortgage balance. Your lender has to agree to do a deed in lieu of foreclosure, and they are only likely to do this if they feel they will end up better financially than if they do a short sale.

I started a Modification in November 2009, after doing a six p;us month forbearabce agreement. I made 4 Trial payments (Nov., Dec., Jan., Feb.). I received a letter from my Mortgage company that my Mortgage was being sold to Bank of America starting March 1, 2010. In May i received a letter from BofA that my HAMP modification was not approved because of negative NVP. Then in July 2010, i received another from BofA for the same modification that it was turned down because of Trial plan default. I have been going back and forth with them since March. While I was making my forebearance payments and trial payments, I am now 16 payments behind and owe $39,000because i have only been making trial payments. Notice to accelarate has expired and their is no foreclosure pending. I have reapplied for the HAMP modification because i have retired and I am on a fixed income. I will not hear about the current modification that i applied for until sometime in February. I am planning on moving in June of this year. If they turn me down for Negative NVP again, what our my options other than foreclosure? is their any recourse i can take against BofA, because i think i am being screwed by them. HELP!!

If the consequence is the same for short sale as a foreclosure, why waste your time? Why not just foreclose and pocket as much as you can before you need to rent?

Hi Rob!

Welcome to forums!

A short sale will have less negative affect on your credit score compared to a foreclosure. A short sale will lower your credit score by 80-100 points whereas a foreclosure will lower your score by 250 points. Those who want to save their credit normally apply for short sale.

Feel free to ask if you've further queries.

Sussane

I lost my job 3 years ago after having brain surgery 3 times. I collected unemployment untill I started receiving SSD. My fiance was making the mortgage payments but we recently broke up and there is no way I can continue to pay my mortgage. I've been using my savings but they are almost depleted. Is a deed in lieu of forclosure my best option at this time i want to go to florida to be with family as I need another surgery and have no medical insurance either. please help

Hi dee,

If you're delinquent on your mortgage payments and don't want to save your property, you can apply for a deed in lieu of foreclosure. This will help you in selling off the property but it will lower your credit score by 250 points. If you're fine with it, then you can contact your lender and apply for a deed in lieu of foreclosure.

How long does a deed in lieu take? Also how will it affect my credit score if I need to purchase a new car in the next year or two?

Hi carol,

A deed in lieu may take 90 days or more to complete. A deed in lieu of foreclosure will have a negative impact on your credit report. It will lower your scores by 250 points. However, if you take required steps, it will help you in improving your scores and then you will be able to buy a car in the next 2-3 years.

Thanks