Just refinanced and now can not afford payments

Hi mposz

If the lender forecloses your property or if you go for a deed in lieu, then the lender will recover the deficient amount resulting from the sale of the property from the PMI. A PMI helps in making up for the deficient amount.

Thanks.

I thought I had heard or read somewhere that if it is a refinanced mortgage it was different then if it was a first mortgage. I am trying to keep the rest of my credit alive, but just seem to keep digging myself deeper and deeper. I have a similar house down the block from me for sale for almost $100,000 cheaper then my current mortgage amount. It is a little smaller, but I don;t think there would be any way for me to sell the house myself and get out of the mortgage. Any help as to going forward with a deed in Lieu? Does that have to be done by a Lawyer? or can I write something like that up myself? Or do I call my lender and tell them that this is were I am heading, and see how they want to handle it. I would think that they would want to do the deed in lieu instead of Foreclosure, as it would save them legal fees and the headache, but I am just not sure. But then if the PMI will cover the loss for them, I would guess they would take it back without many questions.

Do not give up. Do whatever you can to prevent the foreclosure. You would have worked overtime and since your hours were cut, you have time to find a second job. Your wife can do the same. Just dont count on any government programs to help. Best of luck to you.

Is there a difference to how it would affect my credit for the future between the deed in lieu and a straight foreclosure?

I am also facing a deed in lieu. I had a house and could not afford the payments so I rented it out and then purchased a Manufacture home in the same area. The family living in the house up and moved out on me as the husband lost his job. I had the house for sale and had no offers so I do not know what else to do. Any help would be very thankful. Up until now the house has not had any late payments, but I can not afford both payments at the same time, let alone the house payment by itself.

Hi,

To mposz,

A deed in lieu and a straight foreclosure will both lower your credit score by 250 points. A foreclosure will remain on your credit for at least 5 years from completion date. On the other hand, a deed in lieu will remain on your credit report for at least 4 years from completion date.

To Schute,

As you are still not past due on your mortgage payments, I don't think the lender will listen to your request for a deed in lieu. But if you are facing hardship, you can speak to the lender and check if he can give you any other options.

Thanks

I have no way of paying both payments on my own. I had tried to sell the house and had a few different showings, but not one offer. I have it listed for rent again, but not getting any calls. Once the loan goes default, It will be hard to get it back even if I find a renter. How far into default would it have to be before the bank would consider a deed in lieu? I have heard the term short sale too, would that be a better option here? I do have mortgage insurance on the loan so would that cover the balance of a short sale? and would a bank be more apt to do that instead of the deed in lieu?

Yes Schute, if you have mortgage insurance, then it can be used to pay off the mortgage. But how much coverage do you have? Is it enough to cover the entire unpaid balance?

How's the market in your neighborhood? are homes selling at the usual prices? If not, then you won't be able to recover the unpaid balance from the sale proceeds. In such a case, any unpaid debt or the deficiency after the short sale can be paid off from the mortgage insurance.

Short sale is better than deed in lieu as far as the credit effects are concerned. However, if your mortgage is a non-recourse loan, then you don't need to pay any deficiency resulting from the short sale. For more details on Short sale credit effects, check out the information available on this topic.

Good luck

It's a stressfull process to deal with lenders. I would suggest all you are behind in mortgage payment that you won't get help from lenders until you are behind in payment. So if you really cannot make mortg payment...miss it! Its the only way lenders will respond. However, you have to show financial proof including recent pay stub, recent tax and hardship letter. Do ask lender for deed in lieu if you are struggling permanently with finance. PUSH HARD is the only way before foreclosure. Sometimes lender will not hurry...so push your way in for deed in lieu.

I am not thats true.

I ahev seen lenders doign modifications for people who are current on thier payment and have been able show that thier incoem ahs gone down due to loos of job or some other factor

Your credit score and report is really important and it takes lot fo time to build it and you do nto want to just throw it away.

But I do agree that you need to work hard and push the lender to get a modification done.

Its not impossible, but you need patience

Good luck