Posted on: 22nd Feb, 2007 05:18 pm
Do banks have a guideline for value-to- loan ratio they will accept under the Deed-in-lieu-of foreclosure approach? e.g., do they need to expect to recover 90% of loan outstanding before agreeing?
There is no such specific guidelines on that but the bank would normally like to get as much value out of the house as possible. They would only agree to a DIL if they feel that the property can be sold to recover significant amount of the balance dues.
Hi Harley,
Welcome to forums.
I haven't heard of any such guideline regarding lenders accepting a certain loan-to-value ratio for deed-in-lieu. This will vary from one lender to another.
Usually lenders sell off the property for a sale price lower than the property value. They may forgive the debt or sue the debtor in order to get back the remaining part of the money he has invested.
Thanks,
James.
Welcome to forums.
I haven't heard of any such guideline regarding lenders accepting a certain loan-to-value ratio for deed-in-lieu. This will vary from one lender to another.
Usually lenders sell off the property for a sale price lower than the property value. They may forgive the debt or sue the debtor in order to get back the remaining part of the money he has invested.
Thanks,
James.