What are the steps in deed in lieu of foreclosure?

Welcome Deb,

If you're in financial hardship and you're unable to pay the mortgage, you can contact your lender and apply for a deed in lieu of foreclosure. This will help you in getting rid of the property. Also, you won't be liable for paying the balance dues resulting from the property sale.

Thanks for the advice. I have another question regardiing DIL. I have been researching so as to know what I am talking about when I speak with the lender. I have found info that states if you have a second mortage or home equity line on the property then the lender will probably not approve a deed in lieu. Is this true?

Hi Deb!

Welcome to forums!

Yes, there are chances that the lender will not approve a deed in lieu of foreclosure if you've a second mortgage on your property. To know more on this regard, check out the given page:
http://www.mortgagefit.com/predeal/deedinlieu-juniorlien.html

Feel free to ask if you've further queries.

Sussane

Hi, My wife and I split up last year and neither of us are living in our house. Our house was appraised last year for $306,000 which was down from $425000 2 years earlier. I tried to sell the house for $350 and then reduced it to 339 but no one even looked at it. If we go any lower we would just break even after all the realtor charges. I'm trying to rent it but no luck there also. Now I'm thinking of DIL but I have a second mortgage. Both mortagages are still less than $309 but can I still do DIL or short sell?

Hi Mike,

You can apply for a deed in lieu of foreclosure but both the lenders will have to agree to it. Unless both the lenders agree to it, the deed in lieu of foreclosure won't go through.

Thanks

this question was posted in 2006? why is it on this forum still?

[Signature URL is removed as per Forum rules. Thanks]

We are carrying the note on a duplex being held by an LLC. They are behind 6 months in mortgage payments. How does dealing with LLC differ from ordinary owner in foreclosing with DIL

Hi Caesar,

This is something which your real estate attorney will be able to answer better. However, if they are personally liable for the mortgage payments, then you can take legal actions against them if they don't make the payments on time.

Thanks

If the forgiven amount is not the same as the fair housing market value do you have to pay the difference?

Hi Guest,

You will be liable for paying off the deficient balance resulting from the sale of the property. However, if the deficient amount is already forgiven, then you won't be liable for paying anything to the lender.

Thanks

We bought a rental prroperty in 2005 for $295,000 and the market value now is $84,000. I am thinking to do deed in lieu to foreclosure. What is your best suggestion. What is the consequnces? Can the bank go after our primary house or are savings. Need help.
Thank You very much

welcome flor.

deed in lieu of foreclosure can be a very good option to get rid of the property. if the lender accepts this request, then you won't be liable for paying off the deficient balance resulting from the sale of the property. however, this will lower your credit scores by 250 points and you may not qualify for a new mortgage in the next 2-3 years. as the deficient balance will be forgiven, the lender won't come after your primary house or your savings.

I stop paying my morgage in the last 6 months.In the begining, I made so many attempts to discuss my hardship with the lender.At that time I was only behind for 2 mo.I ask if I can make 4 installments to catch up with my morgage.But they always demanded the full amount.Until, I decided not to deal with it anymore.I owe $132000.00 and my house now worth $46,000.00. On top of that,the house had a lot of problems.I want to know if I should short sale or DIL.they said they will give me $3000.00 for relocation and if I do the DIL, I can ask for $10.000.00 and just walk outof it. But have to make sure that they waived all the jdgement of the remaining bal. Is this true.If so, I rather just do the DIL..

Hi lynn,

You can go for the option of deed in lieu of foreclosure. Though it will lower your scores by around 250 points, you won't be liable for paying off the deficient balance resulting from the property sale.

Thanks,

Jerry

My home is going into mediation for foreclosure next week. I became ill with cancer last year and my husband left me and did not keep up the payments of our home. I have not been able to find work and have no income. If we go with deed in lieu with our home how long will I have to stay in my home before I have to leave? We live in Maine.