Died in Lieu or Foreclosure?

[concerned]

I contacted our attorney yesterday to discuss surrendering our homes. She suggested I contact the mortgage company directly and make all the arrangements with them. We have not been late throughout the BK process and we didn't reaffirm, so she confirmed we would not owe a deficiency balance. She also said that at this point, odds are in our favor that the mortgage company(s) may want to do a deed in lieu and that we should do this because it would be better for our credit. I was hoping to take with the lender about it next month since we are paid up through the end of March. She said I should not delay and that I should contact them right away. She said it's not like they can tell you you have to vacate the house tomorrow--there are still rules they have to follow. We obviously want to do the deed in lieu if we can since it would be better on our credit, if this is the case. Is she right? Would the deed in lieu look better? We've already had BK so how much better is the deed in lieu anyway? I was also wondering how much time we will have if we opt to do the deed in lieu versus foreclosure. We only really need a couple months or so to save for a downpayment on a place to rent. Will one versus the other give us more time legally?

Thanks,
concerned

[SinkingFast]

We're working on a voluntary DIL also. But we're not handling it. Our attny is.

I called our Lender when we were notified we were in Breach. We haven't been able to keep up the payments and pay our rent as well. So, we're 2 months, rolling up on 3 months in arrears. We have an offer to purchase our home from a contingent buyer. He's approved by his bank to carry a swing loan if we get another offer that forces his kick-out. The Lender still won't hold off.

We turned the whole thing over to our attny. He's ordered our Title Work to be sure the house has clean Title. He got a copy of the offer faxed to him by our Realtor. Now the attny is gonna negotiate with the Lender. If he can't get them to hold off and wait a bit, he's gonna shoot for a non-deficient DIL.

If you listed the home in the BK and the debt was discharged in the BK, why would you wanna offer a DIL??? You already are not responsible for the mortgage. As far as your Credit Report is concerned, the house is already gone. Your mortgage should show as discharged in BK. Plus, giving the Lender a DIL post BK actually helps the Lender to speed things along.

Right now, the Title and/or Deed are in your name. Nobody can sell the house but you. The Lender is going to have to go thru some sort of "En Rem" process to get your name off the Deed, to perfect the Title, so they can sell the property. If you give them a DIL, you actually help the Lender, and they don't have to go thru the "En Rem" process.

[concerned]

Thanks for all the info. & support Sinkingfast.

One question about this statement:

Your mortgage should show as discharged in BK.

We didn't reaffirm--just kept current. Will the mortgage still be included in our bk? It was definitely listed as one our payments when we filed, but since we were current and thought we'd try to keep the house, our attorney said that was fine, we would be able to give it up later if we could't make a go of it.

So basically, the DIL shouldn't help our credit anyway?

[SinkingFast]

If you listed the Mortgage, and didn't reaffirm, the debt shoulda been discharged in the BK.

You should check with your attny about the status of that.

Sounds like your attny has pretty well washed his/her hands of you tho. Telling you to handle the DIL that way. Ours is taking care of it for us. It's part of the Contract. He'll handle ALL contacts with Creditors, and our Mortgage Lender is a Creditor.

Offering up the DIL if the mortgage was discharged just makes things easier for the Lender and the whole process go faster for them. It won't do a thing for your credit if the mortgage was included in your BK.