Posted on: 25th Oct, 2009 09:18 am
what happens if i do a deed in lieu of foreclosure
Hi ejm,
It is true that if you don't have a steady income, the lenders won't be ready for a loan modification. You will have to prove it to the lender that you are capable of paying the mortgage dues once your loan is modified.
In a deed in lieu of foreclosure, you'll have to surrender the property to the lender. The lender would sell off the property in order to recover the dues. There are chances that after the sale of the property, there would remain a deficient amount. However, you won't be responsible for the deficient amount as the lender would forgive it. Depending upon your state laws, you may not be responsible for paying taxes for the forgiven amount. But, your credit score would go down by 250 points and you won't be able to get a mortgage for the next 3-4 years.
It is true that if you don't have a steady income, the lenders won't be ready for a loan modification. You will have to prove it to the lender that you are capable of paying the mortgage dues once your loan is modified.
In a deed in lieu of foreclosure, you'll have to surrender the property to the lender. The lender would sell off the property in order to recover the dues. There are chances that after the sale of the property, there would remain a deficient amount. However, you won't be responsible for the deficient amount as the lender would forgive it. Depending upon your state laws, you may not be responsible for paying taxes for the forgiven amount. But, your credit score would go down by 250 points and you won't be able to get a mortgage for the next 3-4 years.