Deed In Lieu of Foreclosure
Comments (7)
June 20, 2008
June 20, 2008
If you ever decided to contact your lender to discuss options before looking to a short sale, they may suggest that you consider a Deed In Lieu of Foreclosure. Friends, family, and coworkers in whom you confide the details of your situation may bring it up as well.
In this episode of The Short Sale Show we discuss what a Deed in Lieu is and how it can and cannot help you based on the specific situation you face.
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7 Comments, Comment or Ping
Jodi
Brian, you reference Deed in lieu of foreclosure is not an option if there is a second or LOC attached. Is there a video I missed that speaks to short sale/deficency when there is a 2nd or LOC? Jodi
Jun 30th, 2008
Brian Kurtz
Short sale deficiency is going to be handled in one three ways. I outlined it in-detail in Short Sale Show Episodes 7 & 8.
Just run a search at the top of the page for “Deficiency” and you’ll find what you are looking for.
Jul 28th, 2008
Diane
I have a house I bought to remodel,gutted it, and could not finish the project due to lack of funds. The house is not quite to “dry in” stage, and has some significant cash in it but still far enough away from completion to disinterest other investors. I put it on the market for sale where it has lanquished ,unfininshed, for over 100 days. I have kept up the payments , but can no longer do so and must face the banks. Yes, I have a first and second, AND I have remodel loan. (So no DLF help) I bought the house JUST prior to the bottom falling out of the mortgage loan business. Have tried, but cannot get additional funding. I want to talk to someone who can give me sound advice before I lay my cards on the table with the banks, but do not know where to start. I live in Texas. Can you give me some advice?
Aug 4th, 2008
Brian Kurtz
Diane,
It sounds like you are caught in the bear trap that many other investors find themselves in.
As of the date of this reply, I don’t negotiate short sales in Texas. I will email you the contact information of someone that will be able to put you in touch with the right person though.
Also, if you have 3 loans against the same home you’ll have a total of 3 short sale packages that will need to be submitted. You may have tax issues as well. The law that was passed that washed out “phantom income” that shows up when a mortgage is discounted for a short sale only applies to your primary residence. Keep that in mind and you might want to have a quick chat with a tax attorney in your state before moving forward with the short sale.
Aug 4th, 2008
Shari Serra
We have recently moved to Florida…are in the process of filing bankruptcy …but own a condo in Michigan. We own thousands more than the condo is worth at todays prices, but we cannot afford the home any longer. I am very concerned how the bankruptcy will be handled with the condo..ie…we want to give the condo back ..to Chase…where both the 1st mortgage and the HE loan are. Will we be responsible for anything after the bankruptcy? We are both retired, he is on a pension and I only receive Social Security. Any advice you can give will be appreciated. I was current with both mortgages untiil now, but we cannot pay these bills any longer. Thank You
Feb 28th, 2009
BROWNIE
I live in Michigan and can’t afford my home anymore. My husband lost his job and I have the only income which is just enough to take care of our 5 daughters. I was just discharged of bankrutcy in February, Can I do a deed in lieu knowing we will have to probaly move in with family until we get on our feet or be able to afford else where to live.
Brownie
Apr 17th, 2009
Brian Kurtz
Brownie,
I too live in Michigan. Where are you from if you don’t mind my asking?
In regards to your question, a Deed-in-lieu is really just a voluntary foreclosure. Some things to think about are:
1) If you have more than one mortgage against the property the 1st mtg company probably won’t approve a DIL.
2) The bank does not have any obligation to accept a DIL
3) It often doesn’t make financial sense to do a DIL too soon. You can live in the home up to 12+ mos when factoring in the redemption period so many families choose to stay an not pay for the full period of time in order to conserve funds.
I’m not commenting on whether it’s good or bad, it just is what it is.
Apr 17th, 2009
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