Deed in Lieu vs Foreclosure

[Last Buck]

I lost my 6-figure job over 2 years ago and have since gone through all my savings making my house payments. At age 61 and after hundreds of applications it's obvious I have no hope of landing a similar paying position. I'm now out of money except for my remaining 401k. My house has been on the market for 9 months and it appears that it will now appraise for about $20K less than we owe. Do I stop making payments or dip into my 401k? What will the mortgage company elect to do?

[jakelabry]

Originally Posted by Last Buck

I lost my 6-figure job over 2 years ago and have since gone through all my savings making my house payments. At age 61 and after hundreds of applications it's obvious I have no hope of landing a similar paying position. I'm now out of money except for my remaining 401k. My house has been on the market for 9 months and it appears that it will now appraise for about $20K less than we owe. Do I stop making payments or dip into my 401k? What will the mortgage company elect to do?

Have you tried going the short sale route? Do you want to keep or get rid of the house? You could attempt to get a modification of the mortgage although, without an income/job, that doesn't seem to be a viable option. A Deed in Lieu is a pretty rare thing. Letting the house go in foreclosure may trash your credit (so do DIL and short sale) but it could give you many months payment free while the bank gets around to taking it. Your best bet really is to seek the advice of a lawyer.

[Last Buck]

I'd love to propose a short sale to the lender (WF) but I keep dropping the price on the house (Cincinnati, OH) and we can't even get a bite at $40K less than we paid 5 years ago. And at that price, we're facing a short sale scenario.

[faith]

Originally Posted by Last Buck

I'd love to propose a short sale to the lender (WF) but I keep dropping the price on the house (Cincinnati, OH) and we can't even get a bite at $40K less than we paid 5 years ago. And at that price, we're facing a short sale scenario.

Hello and welcome to this forum,
The link below will give you information about Short Sale.

Short Sale Outpost - Loan Modification Forum - LoanSafe.org

The most important thing to do when doing Short Sale is to price your house right to attract a buyer. Without a buyer, your lender will not approve a Short Sale. You can check www.zillow.com to see the price of the recent sold homes in your area to get an idea about the fair market value. You must price your home within 85-90% of the fair market value in order for your lender to approve a Short Sale and to attract a buyer.

There's links for Success Stories in the link provided and contact numbers for Wells Fargo, please click the link;
Success Stories - Homeowners Who Fought Back & Won - Loan Modification Forum - LoanSafe.org

You also need a financial hardship letter, see link for example of hardship letter.
http://www.loansafe.org/forum/loan-m...p-letter.html/

Hope this helps.

Take care and God bless.

[Paul Molinaro Esq.]

NO LEGAL ADVICE HERE - JUST GENERAL INFORMATION - ANY SIMILARITIES TO ANYONE'S ACTUAL SITUATION IS JUST ONE HECK OF A COINCIDENCE.

Once a borrower decides to short sale, the borrower really shouldn't care what the price drops to... as borrower won't get a dime of it. Any house will sell (okay, just about any) if the price is low enough... heck drop it by $10k every week until it sells could be one strategy. The bank will do its appraisal and make sure it gets enough.

- Paul

[Irish Gal]

Originally Posted by Last Buck

I lost my 6-figure job over 2 years ago and have since gone through all my savings making my house payments. At age 61 and after hundreds of applications it's obvious I have no hope of landing a similar paying position. I'm now out of money except for my remaining 401k. My house has been on the market for 9 months and it appears that it will now appraise for about $20K less than we owe. Do I stop making payments or dip into my 401k? What will the mortgage company elect to do?

Hey LB,

I would consult w/ an atty experienced in real estate/debt collection and get a grip on your specific situation. As Paul said, if you decide to short sell, don't worry about the price. The lender will control all that, anyways. What you would have to ensure re short sale is that you don't get stuck w/ a deficiency judgment from a successful short sale. If a short sale flops (I heard only 30% or so actually succeed) for you, you could go the foreclosure route esp if your loan(s) are non-recourse. Yes, it's not fun to foreclose but you will recover, eventually and not have that financial noose around your neck, anymore and some money in the bank, too. We must plan financially very carefully into this (bleak) econ. You are 61 which is a huge planning factor for you. Many here believe in NOT tapping into ANY savings and NEVER tap into your 401k to pay these predatory lenders who string distressed borrowers along to get them to keep paying in any way they can, and then never deliver a suitable mod, in the end. I would dispose of the property any way I could, rent a nicer place for less and not touch my 401k. At 61, you are going to need every penny you have. The econ is not going to recover for a long, long time. For those in their 60s, they don't have the time (and as you've seen, it's harder to find a comparable job at that age) to financially recover like the youngsters do. It's criminal what's happened to us all, but esp. to baby boomers who now can't retire, ever, it seems. People will be working into their 70s, 80's it seems. If you have a profession, and love the work, no problem. But, if you're a working stiff who has to keep working just to eat, very unfortunate. I wouldn't throw one more dime at these pred lenders. Keep every penny you have and get some legal/financial counsel that best meets your current and future needs. Also, keep reading and educating yourself here. Lots and lots of good info here. Good luck and keep us posted!

[faith]

LB,
Time is the essence in doing Short Sale so you have to price it right at the time you decide to list your house with a real estate agent. Here's the reason why:
1. You don't have to lower your price every week.- I did not listen to my agent to price it right -result no one showed up during the first 4 months of listing.

2. Ok I finally lowered it after 4 months so there were 6 offers BUT

3. The buyers all backed out due to long process by the lender.

4. The lenders now are taking too long to decide whether to accept the Short Sale or not and some do not forgive the deficiency judgment like Bank of America. I have read a thread in this forum that she hired a Real Estate Lawyer but the lender did not forgive the balance owed and the PMI company do not forgive either. .

5. So you don't have to list it again once the listing expires. -I have to list it again and this time I price it right and there were 4 offers came right away, but the first buyer backed out again due to long process by CW. The lender finally approved the 2nd buyer after waiting for 4 months and 19 days.

6. Lenders have a high guidelines in approving buyers, 20% or more downpayment, credit score, job security and nowadays a lot of people lose their jobs.

That's why Time is the Essence in doing Short Sale.

Take care and God bless.