deed in lieu vs foreclosure

[tonya1113]

What is the name of your state? Texas.
What is the difference between the two? The mortgage company suggested trying the deed in lieu.

 

[seniorjudge]

What is the name of your state? Texas.
What is the difference between the two? The mortgage company suggested trying the deed in lieu.

If the mortgage company allows the owners of mortgaged property to deed the land to the mortgage company (instead of paying the mortgage off), that is a deed in lieu of foreclosure.

Foreclosure is where the mortgage company sells the land on the courthouse steps because the people who owe the money have not paid the mortgage.

 

[tonya1113]

Thanks for the reply. If approved by the mortgage company for a deed in lieu does that look better on your credit report than foreclosure? Or is it the same? Also, does a D-I-L require money?

 

[HUD-1]

There can be no secondary liens with a DIL. (ie no oustanding condo fees etc) Also, get in writing an agreement that the lender will not pursue a deficiency judgment if you enter into a DIL. What shows up on the credit report depends on how, or if, the lender reports it to the credit bureau.

 

[seniorjudge]

There can be no secondary liens with a DIL. (ie no oustanding condo fees etc) Also, get in writing an agreement that the lender will not pursue a deficiency judgment if you enter into a DIL. What shows up on the credit report depends on how, or if, the lender reports it to the credit bureau.

Good advice. The DILs in my jurisdiction have great long recitations on them about what the arrearage is and what the property is worth and that it is done voluntarily etc. etc.

This, of course, is to try to forestall a lawsuit where the borrower has paid (for example) 29.5 years on the mortgage and misses two payments. In such a case, obviously, the mortgage lender would be getting lots of gravy.


Q: Also, does a D-I-L require money?

A: Ask the mortgage lender this question. Generally, the answer is no, but if they think they can get some money, they will try.


If the mortgage lender will let you DIL, why don't you sell it? They obviously want to work with you or they would've simply foreclosed.

 

[tonya1113]

The mortgage company has been trying to help me for 5 months now. The house has been on the market since Februrary. I was able to get the account current. The house needs work. I do have the money to get the work done. After that the money's gone. I spoke to a realtor (the one I've had since the beginning is a complete joke and wasted valuable time) said I need a couple thousand to close on the house (if sold). I want to break even but won't. Thus costing money I don't have.