A bank will give you a deed in lieu or a deed in lieu of foreclosure when you give them the deed to your house after you’re unable to make the payments. The benefit of a deed in lieu is that you won’t have a foreclosure listed on your credit report and it won’t affect your credit history. A deed in lieu will remove your obligation to pay your mortgage but you’ll also lose the equity in your home. Read, watch and listen to this content to understand whether a deed in lieu is right for you.
Today on the Ilyce Glink Show, Ilyce updated listeners on this week's developments in the financial crisis, including the $250 billion the U.S. Treasury is investing in banks around the country, of which $125 billion is being invested in the nine largest banks. She took a variety of calls, including one from Wes, who argued that the government is doing exactly the wrong thing and hasn't learned a thing from the Great Depression (Ilyce said they'd have to respectfully disagree with each other). Charles called wondering whether he'd have to file for bankruptcy, and Chris said the Treasury Dept. wants to tap into his Social Security check to pay a deficiency judgment from a bad VA loan from 10 years ago. Dave called to ask about his car's diminished value and Georgia law; several callers wondered if now was the time to refinance residential or commercial loans; Brian called about buying a bank-owned property at auction and what he needed to know about getting the taxes on the property reduced; Gary wondered if he should use his retirement cash (or what's left of it) to pay off his mortgage; and, Ron wanted to know if he should do a deed-in-lieu of foreclosure. To find out more, tune into the show. For show notes and updates through the week, check out her blog at www.thinkglink.com/blog , and sign up for her free weekly newsletter on the ThinkGlink.com home page. Check out the videos at www.expertrealestatetips.net. And be sure to subscribe to her YouTube channel.
A landlord wants to sell her investment property and has trouble. While the property is rented, the rent does not cover the mortgage. The landlord wants to know the effect of using a deed in lieu of foreclosure on her credit score. She called the credit bureaus but could not get a direct answer. Ilyce says that the effect of a deed in lieu of foreclosure on a credit score depends on the individual because each person has different credit factors.
When you inherit a home from a family member, should you keep it or sell it? What can you do with a home inheritance if selling isn't an option? Does a deed in lieu of foreclosure or a foreclosure make sense? To keep the home, you'd need to keep paying the mortgage, taxes and insurance.
Can a lender foreclose on a home before a deed in lieu of foreclosure can be finalized? A title search can delay a deed in lieu of foreclosure process. In addition, whatever the title company finds during the title search can affect the deed in lieu of foreclosure. How does having a name on a title but not a mortgage loan affect a title search? Another reason a deed in lieu of foreclosure may be delayed is that lenders are swamped with similar situations.
When a homeowner signs a deed in lieu of foreclosure it gives up his rights to the home and releases him from paying the mortgage loan, but it doesn't automatically take care of the relationship with the PMI company. A PMI company may still want to get back the money it's losing due to the deed in lieu of foreclosure. PMI stands for private mortgage insurance, which you have to buy if you don't have enough down payment. Learn how a deed in lieu of foreclosure affects PMI.
RealtyTrac, the leading online marketplace for foreclosed properties, announced this morning that the number of foreclosures nationwide in March 2008 ...
If you know for sure you have to give up your home but you don't want to go through a lengthy foreclosure process, sign a deed in lieu of foreclosure. A deed in lieu of foreclosure transfers ownership of your house to the bank and allows you to move on without a foreclosure on your credit history. Learn who may be the best candidate for a deed in lieu of foreclosure and how it's usually used for investment properties.
A homeowner who has already lost one property to foreclosure and is near foreclosure on another asks about the impact of foreclosure on getting another home loan. The homeowner's best bet might be to try to save the second home from foreclosure. With foreclosed homes on a credit history, it will be tough for this homeowner to get another home loan.
A mortgage crisis hotline may be the best bet for this homeowner to avoid foreclosure or a short sale. An adjustable rate mortgage (ARM) and a student loan has put her in a financial crisis, and taking the right steps could help her keep her home. The new FHA secure plan may be a solution to avoid further financial crisis.
When a mortgage lender agrees to sell a property for less than it's worth and forgive the debt it could show up on the homeowner's credit report as a deed in lieu of foreclosure. Homeowners who own property that is worth less than their mortgage loan amounts may be good candidates for this type of solution. But it's important to remember that if the mortgage lender such as a credit union forgives the debt, the homeowner may have to pay a tax bill for phantom income or a deed in lieu on his credit report.