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How can I get a deed in lieu of foreclosure approved?
February 25, 2007
This article gives you excellent advice if you're trying to get a deed in lieu of foreclosure approved by your mortgage company. She talks about what you can do in any tax implications that may be involved. Here is some more information on a deed in lieu of foreclosure that might help. The thing to keep in mind is you have to show the mortgage company you can no longer afford the house and they will be more quickly to respond.
- This is an excerpt from an article posted by Columbus Dispatch, by ILYCE GLINK - Sunday, Feb. 25, 2007.
“Q: In a past column, you advised that offering a deed in lieu of foreclosure is a last resort.
I’ve tried to sell my property for more than two years. I’ve consulted an auctioneer, but he doesn’t think I can sell the property. I can’t rent the unit because it’s in an owner-occupied building and I can’t get a waiver of the rules. I’ve moved because of my job.
I’m low on money and soon will start missing mortgage payments. Can I give it to the bank before it takes action? Can I offer the deed in lieu of foreclosure without hurting my credit?
A: Unfortunately, there’s no way to do a deed in lieu of foreclosure without hurting your credit unless you can get the lender to report your mortgage paid in full.
Talk to your financial institution and see whether you’re a candidate for a deed in lieu of foreclosure. You might not be if you’re current on your mortgage payments. You might want to consult a real-estate lawyer.
Your only choice might be to sell the property for whatever price you can get, even if you sell at a loss, and then get the lender to accept a "short sale" — a sale in which the proceeds aren’t enough to cover the amount owed, but the lender accepts the payment.
You might face tax issues. The Internal Revenue Service would likely treat the forgiven part of the debt as income, even though you wouldn’t have received any cash…”
Comments
When offering a deed in lieu of foreclosure on a property that you posses a 1st and 2nd mortgage on, which mortgage do you process the deed in lieu on, the 1st or the 2nd or both?
You need to proceed with both. Many 1st Mortgages will not allow a Deed-Lieu of Foreclosure if there is a second Mortgage. You need to contact them and ask them what options that you have.
WHAT IF I have both 1st and 2nd trust with the same bank? in this case ,is bank going to accept a DIL?
I have a 1st mortgage of $960,000 and a $350,000 HELOC that I have been basically living off and have spent $125,000 of the $350,000 making payments to the 1st. I have had my house for sale for over a year at a break even price and cant sell it. What should I do.
I have both first ($1,052,000 -negarm, increasing each month) and the second ($485,000 HELOC)mortgage with Countrywide. My brand new house in an upscale golf course community has been on the market for 8 months at a "short sale" price, and I still can't sell it. Used ALL my savings and credit cards to be current with mortgage payments. What should I do???
We took on a bridge loan two years ago to buy another home. The property with the bridge has been on the market for two years at rock bottom price and we can not sell it. We have never missed a payment on our mortgage or the bridge interest only loan, but the mortgage company has called the note on the bridge loan. We have on month, then that property will be in foreclosure, even though we have asked the bank to give us another continuance - remember, we have always paid both loans. Can the mortage company also call the note on our current home? What can we do to protect our home when and if the bank tries to foreclose on the bridge loan property? We don't want a foreclosure on our credit - help!
Our morgage broker stole our home. We now have two morgages.We started with 3 morgages and refinanced to get two. We didn't understand what was going on but the morgage person knew. He says that we have a land contract but we only have a signed notorized paper. We are retired and can't afford to make the payment on both homes. The morgage broker is living in the other home and trying to get us to refinance the house and he dosen't make the payments on time. He is sometimes as much as 25 days late.
How do we get out of this mess?
How do we get out of this mess?
I have missed three mortgage payments because my fixed arm expired and my monthly mortgage became more than my take home pay. I decided to sell the house at that point. It's been on the market but it is not selling. I want to offer the deed to my mortgage company. Are there any particular procedures that I need to go through? My plan was to write a letter offering it to them. When you call you get "low-level" employees who seem to be scripted. I don't want to deal with that. Any suggestions?
I am in foreclosure, and I have had the house on the market for over a year. Almost had a deal but the Realtor was more concerned about her commission. The bank has given me bottom line numbers to do a short sale. Would they do a "deed in lieu of foreclosure" if this is my last resort?
What language can the attorney place on the deed to have the lender forgive the debt and not place a deficiency judgement against me?
Lori, if you get an answer to this question please let me know? I was thinking that if you could get your current credit companies to report how great you pay this would up your scores. How do you do this?
Credit reporting agencies don't have any rules on how they report the numbers. Mortgage payments are recorded if you are late 30 days. Our bills are paid 3-4 days in advance. My credit score is not 750?
The president has gone on air stating that he will sign a bill eliminating the 1099 gift tax on a short sale and dead in lue of foreclosure. Would this fix your problem?
We have called the senator's office and the bill should be out in 30-40 days and it must be your prime residence.
that is another whole story regarding primary residence and homestead act.
Credit reporting agencies don't have any rules on how they report the numbers. Mortgage payments are recorded if you are late 30 days. Our bills are paid 3-4 days in advance. My credit score is not 750?
The president has gone on air stating that he will sign a bill eliminating the 1099 gift tax on a short sale and dead in lue of foreclosure. Would this fix your problem?
We have called the senator's office and the bill should be out in 30-40 days and it must be your prime residence.
that is another whole story regarding primary residence and homestead act.
what all do i have to do to do a deed in lieu. and how long does my house have to be on the market. do i have to be out of my home.
Deed in Lieu complete. Wells Fargo the lender and no liens, taxes paid and HOA paid, deed signed back over to Wells Fargo, keys sent back via express mail. No deficiency judgment or other judgment/promise to pay. Nothing except no more headache. One note on credit reports, I went to annualcreditreport.com (free) and disputed the Wells Fargo credit entry and wallah, the item was removed. That was transunion and now after 30 days I am working on experian then equifax. I just kept sending a dispute that Wells Fargo agreed to take back the property and in my opinion I should be in good standing. I really think that the lender failed to respond to my countless disputes and transunion just removed the entry.
After loosing my job in early 2007, I put my home on the market and have had no luck selling. I fell several months behind and my lender told me that if I resume payments, the outstanding balance would be put at the "end of the loan and due when I finally sell."
I found a tenant, moved out and now the lender is telling me that I owe the entire outstanding balance because it is no longer my primary residence. I can't pay it and they are now proceeding with foreclosure. My tentant is now in danger of being kicked out. This is the thanks I get for not walking away and trying to cover the mortgage. I'd like to do a deed in lieu of foreclosure but I can't with the tenant there and he's not interested in buying on a short sale. What can I do?
I found a tenant, moved out and now the lender is telling me that I owe the entire outstanding balance because it is no longer my primary residence. I can't pay it and they are now proceeding with foreclosure. My tentant is now in danger of being kicked out. This is the thanks I get for not walking away and trying to cover the mortgage. I'd like to do a deed in lieu of foreclosure but I can't with the tenant there and he's not interested in buying on a short sale. What can I do?
I just finished a deed in lieu. Everything depends on the lender, but you do need to show a good faith effort that you have tried to sell the house. My house was on the market for five months. I approached my lender and they insisted that first I do the short sale. Tried that and the house didn't move. Finally, one day out of the blue I received papers for the deed in lieu. Per their paperwork I had two weeks to be out of the house. Wasn't a problem. Reality is that it took them three months to process it and I could have really still been in the house. But it's done. I had to make them remove that the process was a foreclosure on my credit. They did. But the fact that I was many months behind still exists on my record. I don't know how to get them to remove that. But I owe nothing. They reported on the credit that I am paid in full. So approach the lender in writing, as well as calling. Explain your attempt to sell. Get the process started immediately.
I have a Palm Harbor Manufactured home that has been up for sale since last Fall and so far on my 5th proposed buyer that like the usual flakes out for some reason or other the day before closing.
I have it listed for 95 and my last appraisal went for 99. My principal is 93. This home on 1.2 acres is listed below the com parables in the subdivision.
I am a widow of a medically disable vet with my whole VA check going to this mortgage and unable to find work due to
several back injuries in the medical field.
My only choice is to sell the home since my savings is dwindling down.
I am working with a buyer now that is trying to work a deal with FHA and having a problem proving rent worthiness and if that is taken care of FHA wants work done on the septic system.
If this falls through couldn't I just give the damn keys to CITI?
I am so tired of this fiasco of nickel and dimming me to death.
I wish there was an honest person in the reality business that actually wanted to help us out here.
I have it listed for 95 and my last appraisal went for 99. My principal is 93. This home on 1.2 acres is listed below the com parables in the subdivision.
I am a widow of a medically disable vet with my whole VA check going to this mortgage and unable to find work due to
several back injuries in the medical field.
My only choice is to sell the home since my savings is dwindling down.
I am working with a buyer now that is trying to work a deal with FHA and having a problem proving rent worthiness and if that is taken care of FHA wants work done on the septic system.
If this falls through couldn't I just give the damn keys to CITI?
I am so tired of this fiasco of nickel and dimming me to death.
I wish there was an honest person in the reality business that actually wanted to help us out here.
We and my wife just started our DIL process with an attorney who charged us $600 for an hour visit. She "explain" that the DIL process can take up to a week while she makes phone calls. She also stated that its not a 100% granated winner, and that the bank might not accpet the DIL..is this correct?
All I want to know is where can I get a blank Deed in Lieu of Foreclosure form??????
I have the legal background to be able to fill it out.
I have the legal background to be able to fill it out.
A copy of a deed in lieu can be found by looking in any clerk of courts records search. Go through a month of "Deeds" and pull out samples from various lenders. Most contain the wording attorneys are looking for as samples. Do a trace and you will also see a satisfication of Mortgage filed along with the Deed in Lieu. Some are filed as Warranty Deeds but you can tell it is a deed in lieu. Great alternative to foreclosure.
One note, some lenders will make contributions to the seconds to release the lien. I know of a Countrywide who paid $$$ to a second to release the lien for a DIL.
One note, some lenders will make contributions to the seconds to release the lien. I know of a Countrywide who paid $$$ to a second to release the lien for a DIL.
If you do a deed in lieu and it only covers up to 20% of your loan is the difference reported to the irs and listed as income? Or can you negiotate with your lending institution to forgive this and/or forgive a portion?
we have a secondhome in florida & ourprimary is in pennsylvania.we are going under from trying to keep florida,we would like to do a deed in lieu on florida,but is our primary home & assetts safe.please help
I stopped making payments on a property in October 2007. I have had 4 contracts turned down for a short sale (one for 80% of the mortgage with no RE commission). I was told that in order for them to approve the deed in lieu I will need to bring the HOA dues to date (about $15,000 which they have liened the property for). Has anyone heard of this?
I am working on a DIL now. you will have to pay the HOA off for the DIL. Why don't they work with you on a short sale? I would speak with the supervisor and have them open this up again.
They say it is an investment property so they are looking for a higher price on the short sale. They are a very difficult bank to work with. The file has been transferred at least five times and in the process completely lost. I have had buyers wait so long that they walk away in frustration. Doesn't it cost the bank more to foreclose than it would to pay the HOA fees? This is a different market than the past foreclosure market. It's like these banks are following a checklist generated by the computer and not looking at each property separately. It is amazing to me that a friend of mind who works for a bank just received a 6 figure bonus. Something is really wrong with this picture.
I just got approved my DIL with Countrywide.I was told that they will issue 1099. I havent received documents from my lender yet. Does any one know if the term that "they will forgive the remaining of the balance of the loan" stated on documents? Have anyone seen CW deed in lieu documents?
I was one. They forgive the difference but by law they must report the difference. Make sure the 1099-c has the correct value at the time of the transfer. You will receive the 1099-c in January 2010. Ask the IRS about form 982 insolvency for the 1099-c issue. This is what I was told by an attorney.
I just received a conditional approval for DIL from Countrywide today. They requested $3000 upfront fee to be sent overnight. I spoke with the negotiator, i was told that w/o $3k, CW will let the home going to forclosure. I'm hesitated of sending these fee without see deed in lieu documentS. The approval also stated" Promissory note was agreed upon for the amount 00.00 of is required. The promissory note must be signed and returned by the same specified date on documents". Has anyone seen Countrywide DIL approval before?
I have a Condo in Ft. Myers, Fl, where I just to done my business (wood cabinets) in that area, so the condo is my second home, but since the real estate business are so slow my business been side down. I have treated to sell my condo before my economic will be so bad, but was impossible. The bank wants $40,000.00 in short sale, but the two offer I got in 13 months was, under the amount bank approved, now the bank ACS send me the pre-foreclosure letter, but I request for a Deed in lieu with a letter I made. My question is:
If the bank do not accept the DIL of my condo, what I can do. Best Regard
If the bank do not accept the DIL of my condo, what I can do. Best Regard
Ft. Myers is foreclosure cap. USA. ASC will complete DIL's and have several in the area. Call ASC and ask for the DIL. Make sure you type a letter and fax this to ASC. Keep on them. Avoid foreclosure if at all possible.
My mother in law is retiring. She owes 40k on her house but would be lucky to see 20k. She asked the bank for a DIL, but they said the house has to be on the market for 90days before they will approve it. She really isn't worried about her credit. She will be living with us. Her move date out of the state she is in to us is 9/7/2009.
She doesn't want to rent, she won't have the money to make payments on the house. Is foreclosure really to be viewed as an option. It just seems to go against the grain.
She doesn't want to rent, she won't have the money to make payments on the house. Is foreclosure really to be viewed as an option. It just seems to go against the grain.
Do a Short Sale with a CDPE Realtor.
My wife and I owned 2 homes our primary home and a rental.Our primary home went into foreclosure we tried to do a loan modification. The "asshole" lenders played their stupid games until it was to late so we filled a chapter 13, which held them off for awhile. We eventually move into our rental after we finally got our renters out that were 3.5 months in the rears.We are trying to do a loan modification again and we are running into the same bullshit again. What do I do, is there anyone that can help. Confused in North Idaho
I am a single mom and have been behind on my mortgage since March 2009. I have spoken to quite a few realtors in regards to short sales and placing my house on the market. None wanted to be involved or even knew how a short sale worked which is very odd. I've tried renting out my house but had no luck in finding a tenant. I'm stuck in rut and do not know what else to do. I was told by a close friend just recently to do a Deed in Lieu which I never knew about. Will I still be able to get approved if my house was never on the market?
my mother in law passed away. she had a reverse mortage,owes about what it would sell for. would like to do i deed in lieu to get mortage satisfied.
how does a deed in lieu afeck a VA loan?
Have lung cancer, in stage 4. Not a good outlook. Live in West Palm Beach, FL. My son wants me to move in with him so I will not be alone. He lives in South Caolina. Have never been behind on my mtg payment with Bank of America because at 76, have been working until now. Deed in lieu of foreclosure possible?
I need to get a deed in lieu of foreclosure from Wells Fargo. I did speak with American Residential Law Group. They want to charge me $2200 to do the paperwork, which I'm sure will really be done by me through fax, etc, but then they just submit it to the bank, the way lawyers usually do. I was thinking of negotiating directly with them for my condo, which is under water. It's worth about 1/3 of what I paid for it at this point, I think. It also come with an extra small parking spot. I paid $399 for this deal and the last 1BR unit I heard was sold for $200 and that was over a year ago. I believe the prices have dropped since then, so I think it would sell for $150-175, short sell.
My big question is, do the banks check your accounts to see if you're completely broke and if you're not completely broke, do they just reject your request for the deed in lieu of forclosure?
Somebody please correspond with me. Any information is appreciated.
Thanks for reading.
My big question is, do the banks check your accounts to see if you're completely broke and if you're not completely broke, do they just reject your request for the deed in lieu of forclosure?
Somebody please correspond with me. Any information is appreciated.
Thanks for reading.
I am retired. My house is slightly under water. My IRA is dwindling fast and I can't afford the mortgage payment much longer. I am current with payments. I will move to a cheaper place and want to be rid of my current house. The mortgage is with Wells Fargo. What is the best route? Short sale attempt first and if unsuccessful in 3 months Deed in Lieu? Or go for Deed in Lieu right away?
Need advice!!!
Need advice!!!
Short Sale. CDPE Realtor in your area. Call Wells Fargo and get screened for a short sale. Very easy. DIL last resort. Good luck.
I have been working on a loan modification for a year and a half. I just received a letter from Bank of America,declining the modification. Bad enough,I have been unemployed for over 2 years and plowed thru retirement savings,but my wife has Parkinson's and is disabled. We built our home to accomodate her disability. Bank of America is " sorry" to have to tell me they are taking my house. You know what ??? They can have it. I think everyone should stop paying their mortgage payments on April 1st,until these "assholes " wake up and realize they caused the problem.
Paul: BOA computers sometimes send out letters in error. February 1st some new rules are coming out. Just call them tomorrow and start your modification all over. Don't move just keeping pushing them.
Hi we bought a house for 410,000$ in 2006 but now it is only worth 260,000$ per zillow. My husband is on disability and I work. What is a better option for me ? Please help
Nisha: You should call your servicer/lender and ask if you qualify for HAFA. In my opinion a short sale is a great way to go to avoid foreclosure. Deed in Lieu last resort.
Hello, My husband bought a house in Florida as a "second home" in 2007. We never evicted the tenants in the house because after the purchase my husband lost his job and we didn't have money for mortgage or repairs to use it ourselves. The tenants moved out in 2009 at which point we stopped paying the mortgage. For a year our house has been on the market with a couple of offers, but the bank won't accept. Last week we received a load modification document from BofA AND Today we received a DIL agreement from BofA.
What should we do? We no longer have any interest in using this house - it has been vacant for 18 months.
The DIL sounds good but one thing is questionable. It says "if your property is not an investment property and/or a second home we may not pursue a deficiency judgment. In other words, we reserve the right to collect the difference between the value of the property and the unpaid balance on investment properties and second homes."
What is the point of a DIL if they can still pursue a deficiency judgment. If this is the only home we own, but we don't live there, is it considered an investment property or second home? We live in a rental apartment.
What should we do? We no longer have any interest in using this house - it has been vacant for 18 months.
The DIL sounds good but one thing is questionable. It says "if your property is not an investment property and/or a second home we may not pursue a deficiency judgment. In other words, we reserve the right to collect the difference between the value of the property and the unpaid balance on investment properties and second homes."
What is the point of a DIL if they can still pursue a deficiency judgment. If this is the only home we own, but we don't live there, is it considered an investment property or second home? We live in a rental apartment.
Try listing your house with a CDPE and put at market value. Just because they turned down one offer does not mean you are done. DIL should be last resort. DIL terms can me worked out by you and BOA. You sign over the deed and the terms are very specific. Good Luck Aloha.
If gmac won't accept a deed in lieu of foreclosure, can I just "force" the issue by conveying the deed to them?
We have a home mortgage w/ Wells Fargo in Ohio. We are going to pursue a deed in lieu. I want to know if any of you know who to call that makes actual decisions. Name and phone number if you have it. We are 100% perfect on payments for the 5 years we have had the mortgage but need to move in 30 days. Any advice would be appreciated.
I have 4 investment properties all being rented but does not cover the mortgage. All values are at least 20-30% less that the mortgage. Will not recover any time soon. Unsure if tenants know i am selling foreclosing or short saling they will leave. What protects them? What should I do?
Has anyone done a deed in Lieu with BB&T? We have a first and second with BB&T and are in mid-short sale process with NO takers so far. One banker said because of the 2nd a DIL is not possible - even though it is same bank. We now owe at least $100k more than fair market value and it continues to depreciate. Any feedback/advice is welcomed!
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