Anyone had luck doing a deed in lieu of foreclosure w/ 2 lenders?

[leo_075]

We are filing BK in March, however, our lawyer has said that we should try to do a DIL of foreclosure since we have had 2 short sales turned down because one or the other lender has turned it down. Has anyone successfully done this with 2 lenders? How does it work?

Thanks!

[dp1969]

We are filing BK in March, however, our lawyer has said that we should try to do a DIL of foreclosure since we have had 2 short sales turned down because one or the other lender has turned it down. Has anyone successfully done this with 2 lenders? How does it work?

Thanks!

They only recommended a short sale with ours but that's not an option in California. Both our 1st and HELOC wouldn't even give us the time of day...with the market in such a slump. They sure made it a point to call everyday!

[BKcrazy]

Both my mortgages are with the same lender. I was trying for DIL, but in the end decided BK was better. I think if you have two different lenders, you will have a harder time.

[SubPrimeME]

Posting a bit late on this, but you will have 0 chance of getting this to work out. OK maybe 1 and 100. The problem isn't with the 1st, it's the second- they normally have a lien on the home and you cannot do a DIL until the home has a 'clean' title. Which means you must have the 2nd release the lien- normally via a new loan with them. This is a great time to negotiate with the 2nd/HELOC, as they want to get something out of the deal as they know most people will go to a BK at that point.

So if you don't want to go thru a BK, then make sure you have any lien holders release them, leaving the 1st to consider the DIL. Chances are the DIL will not be approved anyways, and in reality- why would you do a DIL? It hits your credit just as hard, and you lose that time that you could be saving for a down payment on something new.

Foreclosure will normally result, so if you have a 2nd- BK isn't that bad of a way to go.... 2nd's are the worst HOW the heck a 'secured' loan can go to an 'unsecured'- for a lack of better words- is beyond me!

[Ugh07]

As subprime said, this will not work

[HHM]

yeah, trying to do a DIL with two different lenders falls under the category of "fat chance". Also, since you are filing BK anyway, doing a DIL is not really any more beneficial to you than simply letting the home go in foreclosure when the 1st lender lifts the BK's automatic stay.