Posted on: 21st Sep, 2010 07:33 am
is a deed in lieu the same as a 'short sale'?
Hi pdcleaver!
Welcome to forums!
The process of deed in lieu is similar to that of a short sale. You will have to contact the lender in both the cases and apply for it. The lender will check out your financial situation and let you know whether or not he will accept your request. However, unlike short sale, in case of a deed in lieu, you won't be liable for paying the deficient balance. A deed in lieu will reduce your credit score by 250 points whereas a short sale will reduce it by 75-100 points.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
The process of deed in lieu is similar to that of a short sale. You will have to contact the lender in both the cases and apply for it. The lender will check out your financial situation and let you know whether or not he will accept your request. However, unlike short sale, in case of a deed in lieu, you won't be liable for paying the deficient balance. A deed in lieu will reduce your credit score by 250 points whereas a short sale will reduce it by 75-100 points.
Feel free to ask if you've further queries.
Sussane
Thank you for the information of a deed in lieu. I am curious to which action would be best, give our situation:
My husband was laid off with three weeks severance. We are very fortunate to have found a new job, however it is in the Midwest and we have to relocate over 1,000 miles away. The pay is less (cost of living is less) yet we still have this huge mortgage to pay until the house is sold. In addition, he is paying for living quarters out there plus well over 1,000 for cobra insurance, etc... Therefore, we are using our savings and investments to pay the mortgage until the house sells in this slow market.
We have excellent credit, never missed or was late on any payment, yet the bank will not make any changes to our mortgage and says they will not until we are late making payments for 3 months. We do not want to ruin our good credit but we cannot continue to use up all of our savings to hold a house we need to sell. Any suggestions for options? Which would hurt our credit rating the least and not hinder us from purchasing in the near future?
My husband was laid off with three weeks severance. We are very fortunate to have found a new job, however it is in the Midwest and we have to relocate over 1,000 miles away. The pay is less (cost of living is less) yet we still have this huge mortgage to pay until the house is sold. In addition, he is paying for living quarters out there plus well over 1,000 for cobra insurance, etc... Therefore, we are using our savings and investments to pay the mortgage until the house sells in this slow market.
We have excellent credit, never missed or was late on any payment, yet the bank will not make any changes to our mortgage and says they will not until we are late making payments for 3 months. We do not want to ruin our good credit but we cannot continue to use up all of our savings to hold a house we need to sell. Any suggestions for options? Which would hurt our credit rating the least and not hinder us from purchasing in the near future?
hi patclr,
you can go ahead and apply for a deed in lieu of foreclosure. however, it is true that the lender will not consider your request unless you're 3 months delinquent on your mortgage payments. it is true that delinquency as well as a deed in lieu of foreclosure will negatively affect your credit report. however, if the lender accepts your request, then you won't be liable for paying the balance amount to the lender.
you can go ahead and apply for a deed in lieu of foreclosure. however, it is true that the lender will not consider your request unless you're 3 months delinquent on your mortgage payments. it is true that delinquency as well as a deed in lieu of foreclosure will negatively affect your credit report. however, if the lender accepts your request, then you won't be liable for paying the balance amount to the lender.