Deed in Lieu of Foreclosure

Sun11598 · **Deed in Lieu of Foreclosure**

Has anyone had any experience with this?

We put our house on the market about 8 months ago - we've had a few lookers - but no offers. The market in that town is crap right now - one of the main employers in the area has had their employees locked out for over a year now.

We're already in our new home - more energy efficient, more room, closer to work for dh NTM he can drive 2 miles then take a bus the rest of the way - so cheaper on his commute as well. We've been paying mortgages and utilities on both homes - but we're starting to fall behind now (on the old house). If we could sell it we'd have at *least* a $500 surplus a month - as it stands we're negative each month right now.

Anyway - we're looking into deed in lieu of foreclosure - basically the mortgage company takes the house for what we owe. We're out the 7 years we've been paying on it and all the expenses we put into it to try to sell - but our expenses would finally be in the black.

Thoughts?

wallace4some · 02-17-2007, 06:31 PM

I wish I could offer some advice, hopefully some others here can...what about talking to an agent? It would be nice to sell it for what you owe and their commission...just a thought!

Good luck!

ajjazzy · 02-17-2007, 06:36 PM

I would talk to the the bank and ask them what you can do. Can you rent it at all? that would bring more money in the house. I would have everything turned off.

desertmom · 02-17-2007, 06:37 PM

It would mess up your credit, as would a foreclosure. Would pricing it below market work at all? Ask the mtg company what they put on your report. Do you owe more than the house's current value?

Sun11598 · 02-17-2007, 06:49 PM

We realize it will affect our credit. But we're in a home we plan to stay in, our credit union will do car loans, and we don't need more credit cards...so we're not too worried about that.

The home is listed right now at about $10,000 more than what we paid - we're willing to sell it for what we owe (plus the realtor's comission).

We have considered renting - but honestly I don't think we could get much out of it, and it's an older home, so we'd still be doing all the upkeep. We did tell the realtor we'd be willing to consider a lease to own option - but the person who asked about that never called back.

FWIW - We're not at risk of foreclosure yet - we just want to avoid that.

desertmom · 02-17-2007, 06:54 PM

It's great you are exploring your options before you have to make a decision. Can you work it out w/the mtg company to leave your credit clean and take the deed? I personally, would wait to act a bit longer, trying to sell before doing anything more. Check w/the laws in your state, but I think that you have a certain window of time to unload it after the notice of foreclosure goes out. Also, there are a lot of predators who will offer to take it off your hands, such as "We Buy Ugly Houses". You can look at them, but don't let them know how much you owe. They will ask, because they, obviously want to buy it cheaply, but it's none of their business.