Deed In Lieu vs Short Sale - effects on credit rating?

[muerte42]

Looking for some info...

All things equal, which workout option typically hits your credit rating harder--a deed in lieu or a short sale?

Bought my home in Florida for $221k and now it's worth $130k. I have since had to move to take a job paying less money. My wife and baby spent a month in the hospital due to pregnancy complications, so we lost several months of her income due to that. I had been able to rent out my previous home, but now the tenants are gone and I can't find any new ones...so I'm in eminent danger of default.
I've tried to work with the Citi folks, but every time they tell me that they can't help me because I'm current on my mortgage.
I would love to keep the house, but I can't afford it any longer.
Should I go into default and try to get a mod--or should I just send in the keys and walk away?

I absolutely HATE how bad this eats aways at you as you lay in bed each night!

Thanks for the help! Y'all are amazing!

- Jeremy

[DBarr13447]

If you want to keep the house, don't give up!

However, you may need to be a couple months (60 days) late to show you're in financial trouble & get their attention. At least that was our experience.

PS: There's alot of us awake in the middle of the night!

[Ready2Run]

As DBarr said, there are a lot of us awake in the middle of the night. I find myself up till 2, 3, or 4 am just about every night. What you decide to do will be what works best for you. Reading people's stories might help, it has for me. Personally, I tried the Mod approach even being current and submitted all the papers just to be told I'm current and denied. That didn't help much in terms of solving the problem but for me at least I know I tried. Having that denial letter helps me sleep a bit but now I'm up trying to figure out what's next. I'd say take the time to read and learn the laws in your area, then talk to an attorney, then make your decision. One way or another it WILL all work itself out. For me, I'm currently looking for an attorney. Hope this helps.

[laststraw]

Don't know what's best for you but can tell you that most servicers require your home to be on the market for 90 days before they will even consider a deed in lieu.

Also, I requested deed in lieu paperwork thinking it would be best for both parties. They required very comprehensive financial information and wanted me to sign a statement that said I'd be liable for their "damages and losses" if the financial information I submitted was not accurate. My attorney called it pre-judgment discovery and advised me not to submit it. A deed in lieu is purely voluntary on their part and I have yet to hear of anyone who actually got one.

[muerte42]

Thanks for the info, y'all. Sometimes it helps just to hear from others who are paddling in the same boat...

What criteria are you using to evaluate attorneys? And at what point in the process did you engage them?
We're probably going to end up going into default next month (which goes against every fiber of my character), so I expect the 'process' will start to start moving pretty soon.

Has anybody on here had success with Citi before they went 60 days delinquent? If so, I'd be very interested in hearing how they did it.

Good luck to you, my fellow paddlers!