Posted on: 23rd Nov, 2008 04:04 pm
about 10 years ago, i co-signed a loan for my daughter and son-in-law to buy a home in north carolina. his name and my name are on the deed. they divorced about 4 years ago. in the meantime, for the last year. he and his girlfriend have been living in the house. he assured me that he was making the mortgage payments. unbeknownst to me, he was not making payments. i didn't know anything about it until about 3 weeks ago, when i received foreclosure papers in the mail. i have been devastated and overwhelmed with fear. the balance on the house is approx. $126,000. it is worth somewhere in that neighborhood. maybe a little less. it needs a lot of work and will cost approximately $12,000 in repairs.
i contacted an attorney and he suggested a deed in lieu of foreclosure. if i take this route, will i lose my home or any money that i have saved in my personal accounts. i lost my husband last year and now, i'm afraid i will lose my home and my life savings. what are the tax implications if i choose to do a deed in lieu of foreclosure?
any information you can give me will be greatly appreciated. i'm scared and not sure what to do. thank you.
i contacted an attorney and he suggested a deed in lieu of foreclosure. if i take this route, will i lose my home or any money that i have saved in my personal accounts. i lost my husband last year and now, i'm afraid i will lose my home and my life savings. what are the tax implications if i choose to do a deed in lieu of foreclosure?
any information you can give me will be greatly appreciated. i'm scared and not sure what to do. thank you.
Hi jhiggin!
Welcome to forums!
A deed in lieu is one of the ways to avoid a foreclosure. It is a process where you will have to give away the property to the lender who will try to sell it in the market and recover his debts. There are chances that the lender will have to sell the property at a deficient amount (amount owed by you - amount recovered from the sale). In a deed in lieu, this deficient amount is forgiven by the lender. As the lender will forgive the loan, he will not place liens on your bank account or other property. However, you will have to pay taxes on the forgiven amount as the tax department will consider this as an income on your part. To know more about deed in lieu, check out the given link:
http://www.mortgagefit.com/deed-lieu.html
Feel free to ask if you have further queries.
Sussane.
Welcome to forums!
A deed in lieu is one of the ways to avoid a foreclosure. It is a process where you will have to give away the property to the lender who will try to sell it in the market and recover his debts. There are chances that the lender will have to sell the property at a deficient amount (amount owed by you - amount recovered from the sale). In a deed in lieu, this deficient amount is forgiven by the lender. As the lender will forgive the loan, he will not place liens on your bank account or other property. However, you will have to pay taxes on the forgiven amount as the tax department will consider this as an income on your part. To know more about deed in lieu, check out the given link:
http://www.mortgagefit.com/deed-lieu.html
Feel free to ask if you have further queries.
Sussane.
Hi Jhiggin,
Welcome to the forums.
You won't lose the money saved in your personal accounts if you go for deed in lieu. But yes, you'll lose the home. Deed in lieu is all about handing over property to the lender who'll sell it off and retrieve the loan balance.
Now, if you go for deed in lieu, you may have to pay deed tax provided you don't qualify for mortgage tax relief .
May god bless you.
Samantha
Welcome to the forums.
You won't lose the money saved in your personal accounts if you go for deed in lieu. But yes, you'll lose the home. Deed in lieu is all about handing over property to the lender who'll sell it off and retrieve the loan balance.
Now, if you go for deed in lieu, you may have to pay deed tax provided you don't qualify for mortgage tax relief .
May god bless you.
Samantha
I am trying to do a deed in lieu of foreclosure,if the bank agrees to it, and sell the house, I am responsible for the deficient amount.
Hi marie,
As you are trying for a deed in lieu foreclosure, you will not be responsible for paying the deficient amount. The lender will forgive your deficient amount. But you will have to pay taxes on that deficient amount as the tax department will consider this as your income.
Thanks,
Jerry
As you are trying for a deed in lieu foreclosure, you will not be responsible for paying the deficient amount. The lender will forgive your deficient amount. But you will have to pay taxes on that deficient amount as the tax department will consider this as your income.
Thanks,
Jerry