Posted on: 25th Jul, 2008 08:22 pm
We live in CA and our home has been in a short sale process since March'08. a default has already been filed since June 3rd. Now that we are at the end of the short sale process, the bank asked the buyer to add 6K more to the price offered, the buyer dropped out. And now they relisted our home again in the market. We are afraid there's just not much time left to find another buyer and we'll end up being foreclosed by Sept. Can we still do the "Deed in Lieu" instead of just going on a regular foreclosure?? And Is it a better option for us to do that way?? We are really financially struggling due to so much credit card debts. But we are afraid that we get 1099ed later and end up with more debts. Please kindly advise ASAP... we really need it to ease our minds. Thank you and God bless!!
Welcome marrieta.
Foreclosure and deed in lieu will have similar credit affect but if the lender accepts the deed in lieu then he will not come after you for the deficiency judgment. And you need not to pay tax on the forgiven debt according to the
Mortgage Debt Forgiveness Act . So if you cannot sell the property then contact the lender and ask him to accept the deed in lieu.
Let me know if you have any further queries.
Foreclosure and deed in lieu will have similar credit affect but if the lender accepts the deed in lieu then he will not come after you for the deficiency judgment. And you need not to pay tax on the forgiven debt according to the
Mortgage Debt Forgiveness Act . So if you cannot sell the property then contact the lender and ask him to accept the deed in lieu.
Let me know if you have any further queries.
Hello Marrieta,
Convincing your lender to accept a Deed in Lieu (DIL) of foreclosure, should only be used as your very last, extreme resort to avoid a foreclosure. It can quickly release you from all or most of your debt that is associated with your defaulted loan. It does not save your home, but it is a little less damaging on your credit report than a foreclosure would be. The credit report will still show that your loan went into arrears, how many months of late payments you had, and that the lender closed the account.
Good luck.
Convincing your lender to accept a Deed in Lieu (DIL) of foreclosure, should only be used as your very last, extreme resort to avoid a foreclosure. It can quickly release you from all or most of your debt that is associated with your defaulted loan. It does not save your home, but it is a little less damaging on your credit report than a foreclosure would be. The credit report will still show that your loan went into arrears, how many months of late payments you had, and that the lender closed the account.
Good luck.
