Posted on: 30th Nov, 2009 07:45 am
I purchased a piece of property (vacant land, not a home) from a private party. They carried the loan balance of $75,000. Due to the current real estate economy and a financial hardship on my part, I am behind on the lien payments. Also, the property is probably not worth what is owed on it. Since it is a private lender and not a home, how does this work and what effect will it have on me and/or my credit?
What is the proper proceedure for such a surrender?
What is the proper proceedure for such a surrender?
Hi brnewman,
In a deed in lieu, the borrower usually signs over the title to the lender, who then sells off the property to satisfy the lien. However, I'm not sure if that will be the case in this situation. Actually, a lot depends on the terms of the agreement you had with the private party. As far as the effect of the deed in lieu on your credit is concerned, your scores will be negatively affected if the deed in lieu is reported to the credit bureaus.
In a deed in lieu, the borrower usually signs over the title to the lender, who then sells off the property to satisfy the lien. However, I'm not sure if that will be the case in this situation. Actually, a lot depends on the terms of the agreement you had with the private party. As far as the effect of the deed in lieu on your credit is concerned, your scores will be negatively affected if the deed in lieu is reported to the credit bureaus.
How would a Deed in Lieu be reported to the Credit Bureau if it was from private funding ??
hi rhonda,
it will be reported as a "deed in lieu of foreclosure" in your credit report and it may lower your scores by around 250 points.
it will be reported as a "deed in lieu of foreclosure" in your credit report and it may lower your scores by around 250 points.