deed-in-lieu

Lynn · Post by **Lynn** » Tue Jan 27, 2004 1:29 pm

Hi - My husband and I are separating. We currently reside in a MH in a community. We've had a "for sale" sign up for months, we've had four hits. No bites! No equity! Niether one of us can afford the mortgage plus lot rent on our own. I've read about deed-in-lieu as opposed to foreclosure. Is this a feasible option for us? The lender doesn't refinance and our credit is poor.

Thank you for your time. Lynn.

Danny · Post by **Danny** » Tue Jan 27, 2004 2:28 pm

not knowing your whole finance situation its hard to say....a deed-in-lieu is hard to obtain, the banks want there money not the property..you should call your lender and explain your sitution you may can do a short-sale but you will still owe the diffrence and may can work that out with your lender its all up to them.

Lynn · Post by **Lynn** » Tue Jan 27, 2004 3:01 pm

how does a short sale work? the lender is very tight-lipped and from what they say, having someone assume the loan is our only option...

Lynn · Post by **Lynn** » Tue Jan 27, 2004 3:28 pm

I checked on the short-sale option (source = http://realtytimes.com/rtcpages/20010830_shortsale.htm). Even if I wanted to go this route, I don't have a potential buyer to even start the process...! (deep sigh...)

Danny · Post by **Danny** » Tue Jan 27, 2004 3:36 pm

a laon assumption and short sale are two diffrent things...with the short sale..the lender has to agree to let you sell the home for less than the amount owed...they then take the reduced loss or bill you for the remainder...what ever you and the lender agree on...a laon assumption is when you get someone to take the loan as-is and make the payments but they still have to qualify and pay closing or title transfer ...can you rent it out for the amount of the payments and lot rent? or possibly do rent to own ....have your att. draw up a contract between you and the party and let them make the payments..the drwback with this though is that if they dont pay you you have to go through legal process to take possession of the home again...Hope everything works out for you both..GOOD LUCK!

rmurray · Post by **rmurray** » Wed Jan 28, 2004 7:14 am

Deed-in-lieu will NOT be an option for you...It is commonly used in unusual mortgage (not home only type finance) situations...

Example...there might be a small equity in the home..but owner has no means of paying payments..typically a lender will accept this arrangement if they think they can sell and not lose money..

Another situation could be a large tax lien on the equity..that the first mortgage lender would have no responsibility for..

Another point to note....If you divorce...remember the divorce court can assign debt responsibility....but cannot change origianal contracts...so..if there is debt that is joint..the court cannot make a lender change the details of a contract..and if your spouse does not pay something they are ordered to..you are still fully responsible..

Lynn · Post by **Lynn** » Wed Jan 28, 2004 3:59 pm

As a _ last_ resort - if we should abandon the MH, what's the worst that could happen? (Since we are separating (no formal documents filed) and will have individual apartments.) Thanks for all of your feedback.

rmurray · Post by **rmurray** » Wed Jan 28, 2004 5:17 pm

Lots...

The lender will take the home and sell it to the highest bidder....

You will be responsible for the balance left..plus the cost of reposession...plus the costs of the sale..

They will have the right to try to collect this money any way legal..

They can sue for a judgement..which attaches everything you 2 own..in some states they can garnishee wages to pay judgements..In most states judgments are good for at least 10 years..some states much longer..in a few states they are good forever..

They could sell their claim to professional collection firms..they will then have all collection rights..

They can write off your loss and not expect to ever collect it...but in this case they must turn in a 1099 for income on you to the IRS for the amount of the claim..This will mean you will owe thousands on taxes..penalties and interest..

Bankruptcy can eliminate most of the above...Talk to an attorney in your area about the rules in your state...If you do not file bankruptcy...this will haunt you for many years to come..

Bill Fry · Post by **Bill Fry** » Wed Jan 28, 2004 5:48 pm

You can recover from bankruptcy a LOT quicker then by just abandoning your debts.True you have to pay a attorney but thats a drop in the bucket compared to the alterative.The IRS can and will haunt you forever.You have to work and pay taxes so they will always have tabs on you.

Lynn · Post by **Lynn** » Wed Jan 28, 2004 6:25 pm

ugh! In what order should I declare bankruptcy? Before or after I move into an apartment? Won't the bankruptcy show when I go to get an apartment and my chances of getting one be slim to none? My husband already has an apartment.

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