Posted on: 27th Nov, 2007 06:48 am
[font=verdana:d41103ca0e][font=verdana]what happens when the amount owed on the mortgage is exceeding the amount the property is listed for and a deed in lieu of foreclosure is executed? in this case, the property is listed for $70,000 less than what is owed on the mortgage and that extra money had been used to purchase new cars, boats etc. do the owners just walk away without having to pay for those items or does the bank go after the extra money when the property sells? the individual says it doesn't affect his credit report and they've just walked away.
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Deed in leiu will affect your credit much the same way as foreclosure will. Think of it as a volunteral reposession. There is more paperwork and explanations but in the end you still havent lived up to your responcibilities. So your credit will be ruined and the lender has the option to file for deficiency judgement if they deem that cost effective.
Thank you for your quick response!
Hi mountaineer,
You are most welcomed.
If you go for the deed in lieu of foreclosure, I think your credit report will be affected but lesser then the foreclosure. And bank will not pursue for deficiency judgment if you go for the deed in lieu of foreclosure.
Now Eugene I heard that lender does not pursue for deficiency judgment if you go for the deed in lieu of foreclosure. Can you please tell me in which condition lender may ask you for the deficiency judgment even though you have go for the DIL.?
Thanks,
Larry
You are most welcomed.
If you go for the deed in lieu of foreclosure, I think your credit report will be affected but lesser then the foreclosure. And bank will not pursue for deficiency judgment if you go for the deed in lieu of foreclosure.
Now Eugene I heard that lender does not pursue for deficiency judgment if you go for the deed in lieu of foreclosure. Can you please tell me in which condition lender may ask you for the deficiency judgment even though you have go for the DIL.?
Thanks,
Larry