Posted on: 16th Oct, 2009 06:18 am
I relocated from NH to MA 13 months ago to accept a new job. My house has been on the market for over a year with no interest at a price at or :? below what I owe. My house is in great condition, but the real estate market is dead. I have never missed a payment and my credit score is over 700. However, I can't continue to pay the mortgage & pay rent and other bills at our new address (negative net income of $2200/month). My bank has indicated that I qualify for a short sale or deed in lieu. I have had no interest on a short sale and am considering the deed in lieu. I understand my credit will take a hit of roughly 250 points, but will the lender try an recover funds from my limited funds in my Bank account, broker funds, or IRA if I proceed with a deed in lieu.
hi,
if there is a deficiency from the sale of the property, you will be responsible for the deficiency. but in most of the deed in lieu cases, the lenders forgive the deficient amount. it is true your credit will be affected, but chances are that you will not have to pay off the deficiency. i think you should talk with the loss mitigation dept. of your lender and ask them about the deficiency. if they are ready to forgive the deficient amount, you should get it in writing from them. but in case they do not forgive the deficiency, they can come after your other assets, though they will not be able to come after your ira.
if there is a deficiency from the sale of the property, you will be responsible for the deficiency. but in most of the deed in lieu cases, the lenders forgive the deficient amount. it is true your credit will be affected, but chances are that you will not have to pay off the deficiency. i think you should talk with the loss mitigation dept. of your lender and ask them about the deficiency. if they are ready to forgive the deficient amount, you should get it in writing from them. but in case they do not forgive the deficiency, they can come after your other assets, though they will not be able to come after your ira.