Comments on: Short Sale vs. Deed-in-Lieu: What’s Your Best Choice?

By: Darius Wells

Darius Wells — Mon, 09 Nov 2009 05:31:54 +0000

The lenders rarely does a deed-in-lieu. The best way to get it approved is to do it before the loan goes to foreclosure. It is still subject to investor guideline.

By: angela

angela — Tue, 29 Sep 2009 07:04:20 +0000

what section of the loan document does it say it is non-recourse?

By: angela

angela — Tue, 29 Sep 2009 07:01:00 +0000

Will you tell me how you were able to give back your 600000 house to the bank when you have money to buy another house? I am in pre-foreclosure right now since I don’t have any income but I have some savings. I cannot afford to pay the mortgage anymore and used up my savings. I need that money to survive. What do I have to do so the bank will not go after my savings. If they do that I will be living on the street.?

By: Misty

Misty — Fri, 25 Sep 2009 16:41:12 +0000

A quesion to Nick from his April post. I agree with what you are saying, except what if you don’t have the luxury of securing a home before you let your current one go? We are in that situation right now.
We’ve always been the “good” people…have paid all of our bills on time for the last 19 years, we have good-excellent credit, but the economy has hit us just like everyone else. We bought a house in Idaho 9/06 for $272,000. We currently owe$218,000. Houses are not selling and we can’t afford this $1700/mo payment any more. We’ve exhausted all of our funds (even retirement and children’s savings accounts) to keep everything paid on time. Well, we’ve hit the bottom and cannot afford this mortgage anymore.
We’ve talked to our lender to see if they would do a “Deed in lieu” or “Short Sale”. They are discouraging us or the simple fact that we have a high credit score and we are not yet late on our mortgage payments.
What a catch!
We call to talk to them in hopes they will work with us now (before a foreclosure), but since we are they good guys and aren’t late on payments for 3 months, they would wan’t a “cash donation (to the tune of up to 20k)” at the table in order for them to work with us. How does this make sense? If we had the cash, wouldn’t we be able to afford to stay in our home?
We are at rock bottom but don’t want to screw up our credit. (We still need to be able to get into another house at some point). Does anybody have any great ideas? We don’t want to not pay for three months and have them give us some other excuse at that point that won’t help us anyway.

By: Susan

Susan — Wed, 27 May 2009 20:29:31 +0000

We found our dream home in 7/07, bought, rehabbed and moved in. We put our exisiting home on the market in 7/07 as well. By 9/07 I lost my $90k a year job. The old house sat on the market for a full year until my husband lost his job in 9/08. We finally were able to rent the home to a military family and they moved in 10/08. They just vacated the lease 4/09 and left the house needing $20k in damage repair. We dropped the price of the home since our bank would accept a short sale to the cost of the loan. No one wants to buy and now it’s not even worth showing. We asked the bank today to accept the deed in lieu of forclosure. They will get back to us in the next couple days.
All I can say is that you shouldn’t worry about your credit scores. So many people are in the same situation. My husband is back at work now and his credit union is willing to work with us to refi our mortgage so we can have a more affordable payment. Our scores dropped to 570 and 620 when we had to stop paying our credit card bills in order to make mortgage payments. The credit union went back before our hardship and looked at our old scores and how we never missed any payments on anything. Do what you have to keep your family safe, happy and healthy. Every where I go I hear about people having to let homes go. It’s just the way it is right now. I feel that this is truly a depression and I agree that the politicians and banks put us in this situation. Obama could be president for the next 20 years and he will never fully clean up the mess. Good luck to you all.

By: Sue Dellwin

Sue Dellwin — Wed, 20 May 2009 21:11:13 +0000

How would it work if the mortgage due is $55,000 and the house would definitely selll for something like $450,000? Would I get the other $395,000 at sale or is there a better way to set that up. My house is worth more than the mortgages.
Thanks for any feed back from anyone!
Sue

By: Andy

Andy — Fri, 01 May 2009 16:06:42 +0000

I agree with Nick, except there is one other item to take care of first. Rent out the house you will be walking away from. My house is 70k underwater. I can afford the payments on my fixed 5.5% loan, but it is a financial ball and chain for my future. I’m going to buy a better house for less with my fiance. After that, if I can get a renter to cover the mortgage payment on the old house, then great. If not, I will rent it for whatever I can get, and just stop making payments. It will take nearly a year for the foreclosure, in which time I will save on my payments, and collect rent. My loan is non-recourse, so the bank can’t seize my other assets, or lay claim to my rental income. I won’t need credit cards due to the money saved/collected in this year, and by the time we want to move again, my credit would be rebuilt.

By: Nick

Nick — Thu, 30 Apr 2009 02:34:49 +0000

Hello All! We as Americans sit today in the drivers seat. These big banks walking arm and arm with our politicians steal from us and rob us. They are now worried that we will walk away from our homes and the loans they sold to investors will be worthless! Yet they still bonus themselves to the tune of millions and have lost mass amounts of money with their hairbrained securitized investment products. Now they have taken tax money and are selling that money back to us at a profit or they keep it for liquidity. I say everyone in this country should apply for a loan mod, or start looking for away to find a home that is at the bottom of pricing, buy it, it will only increace in price (gain for you) and give the bank back your property and let them sell it to the next lucky fellow average Joe at a discount. Then we will all have affordable housing and give the banks (criminals) the finger and hopefully they all kill themselves. Yes I do finance and I gave my 600000 house back, but not before (KEY) I bought a bigger and better house for 310000 with an inground pool in a better neighborhood it sold for almost 710k in 2005!! It is possible! I even save 1800k per month!!
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By: Vince

Vince — Tue, 21 Apr 2009 18:35:59 +0000

As far as Jennifer’s comment as to people abusing these systems, these are business transactions between individuals and companies (banks/mortgage lenders). Folks need to drop some of the emotional content associated with this. Of course pride, sense of fair play and all of our individual emotional baggage are at the heart of some of this, but it is best to try and get beyond those. Though there is a segment of the population which was reckless in buying unaffordable homes, flipping houses, etc, as you can see many more individuals/familes are in situations where circumstances have changed and they need to extricate themselves from their current homes. Even in cases where individuals were less than responsible, the current state of the housing market has far more to do with corporate and governmental recklessness than individual recklessness. I’m not about to lose sleep over a bank losing a fraction of the money a family is losing in a short sale or deed in lieu. Use this and other sites to make a cogent, well considered personal business decision.

By: Publius

Publius — Mon, 24 Nov 2008 11:27:36 +0000

kz – you have options depending on what state you are in. Lenders are now working with borrowers in your situation and you may also qualify for a government program. Freddie and Fannie will announce their streamlined modification guidelines on December 15. It might be a good idea to consult a real estate attorney regarding your options — they will vary by state.