Posted on: 30th Mar, 2009 01:43 pm
I am considering a 'deed in Lieu' and would like to know if we need to hire an attorney to review the agreement before we sign anything. It has been suggested that we only sign the contract if we are not held responsible for any deficit, otherwise we are better off just doing a foreclosure. Right now we are 3 months behind on our payments.
Our situation is unique because we are also in litigation with the realtors, inspectors and sellers for some major non-disclosures on the property. Not only did we discover $200,000 worth of repairs needed that we did not know about, but the market crash lost $150,000 in value and then we got our incomes cut by 60%! As it stands now, our overhead expenses are 2X our income and we are $350,000 'underwater'. We have job leads in another county and will likely have to move to get work. Isn't a loan mod out of the question? Foreclosure seems to be our best option right now but was curious if we should go for the DIL to try and save our credit.
Prior to this incidence, we had perfect credit scores and a 20 year history of homeownership as well as a recent combined income of $120,000/year. It is a shame to throw away all of our hard work due to extenuating circumstances that are only temporary, but we see no other choice. Any thoughts are appreciated. Also, what happens if we eventually win a lawsuit? Is the bank going to come after us? I was told the only leverage they have is the house, which we will gladly give them.
Our situation is unique because we are also in litigation with the realtors, inspectors and sellers for some major non-disclosures on the property. Not only did we discover $200,000 worth of repairs needed that we did not know about, but the market crash lost $150,000 in value and then we got our incomes cut by 60%! As it stands now, our overhead expenses are 2X our income and we are $350,000 'underwater'. We have job leads in another county and will likely have to move to get work. Isn't a loan mod out of the question? Foreclosure seems to be our best option right now but was curious if we should go for the DIL to try and save our credit.
Prior to this incidence, we had perfect credit scores and a 20 year history of homeownership as well as a recent combined income of $120,000/year. It is a shame to throw away all of our hard work due to extenuating circumstances that are only temporary, but we see no other choice. Any thoughts are appreciated. Also, what happens if we eventually win a lawsuit? Is the bank going to come after us? I was told the only leverage they have is the house, which we will gladly give them.
Hi Jen,
It is good to hire an attorney and let him review the deed in lieu docs. However, you should note that both a deed in lieu and foreclosure will ruin you credit score in a similar way. In both the cases, your credit score will drop down by 250 points. But in a deed in lieu, you will not be responsible to pay off the deficient amount resulting from the sale of the property.
The bank has given you the mortgage. If you don't pay it off, the bank has all the right to foreclose the property.
Thanks
It is good to hire an attorney and let him review the deed in lieu docs. However, you should note that both a deed in lieu and foreclosure will ruin you credit score in a similar way. In both the cases, your credit score will drop down by 250 points. But in a deed in lieu, you will not be responsible to pay off the deficient amount resulting from the sale of the property.
The bank has given you the mortgage. If you don't pay it off, the bank has all the right to foreclose the property.
Thanks