Successful DIL Story

[mbmom213]

Just wanted to post some info here on my DIL process hoping it may give hope or encouragement to someone that may need it. I began non-payment Dec. 08 (small, local bank). Owed 121,000...home was worth 75,000. (recourse loan) We began negotiating when I was about a month late. They would not reduce any principal. Said they would do a short sale but said I would be responsible for the difference!!! They did attempt to work with me and mod my loan, but the mod they offered certainly did not benefit me in the long run. Did I really want a 40-year mortgage??? I was way underwater, and could not even afford the basic repairs the home needed to continue to live there. I had a small heloc with the same bank that I had used to pay off some credit card debt the year before. We finally got to a point where they realized I was not afraid of foreclosure or it's consequences. I offered them the DIL and agreed to pay back the heloc @ 0% interest in the form of a promissory note. Foreclosures in the area were taking over 12 months, so they took this offer. I felt like this was a fair deal. I am now renting a beautiful condo for hundreds less than my mortgage payment was, and without the worries of repairs, upkeep etc. My mortgage now shows satisfied in the county records, and I was receiving offers for credit in the mail not even 6 months later. I wish anyone going thru this process the best. It was the most stressful 5 months of my life. Please hang in there. Stay tough, but be willing to negotiate at the same time.

[59Cottage]

Thank you for posting that. We can all use the encouragement. I wonder if the fact that you were with a small, local bank made the difference.

[we're_still_reviewing]

Originally Posted by mbmom213

Just wanted to post some info here on my DIL process hoping it may give hope or encouragement to someone that may need it. I began non-payment Dec. 08 (small, local bank). Owed 121,000...home was worth 75,000. (recourse loan) We began negotiating when I was about a month late. They would not reduce any principal. Said they would do a short sale but said I would be responsible for the difference!!! They did attempt to work with me and mod my loan, but the mod they offered certainly did not benefit me in the long run. Did I really want a 40-year mortgage??? I was way underwater, and could not even afford the basic repairs the home needed to continue to live there. I had a small heloc with the same bank that I had used to pay off some credit card debt the year before. We finally got to a point where they realized I was not afraid of foreclosure or it's consequences. I offered them the DIL and agreed to pay back the heloc @ 0% interest in the form of a promissory note. Foreclosures in the area were taking over 12 months, so they took this offer. I felt like this was a fair deal. I am now renting a beautiful condo for hundreds less than my mortgage payment was, and without the worries of repairs, upkeep etc. My mortgage now shows satisfied in the county records, and I was receiving offers for credit in the mail not even 6 months later. I wish anyone going thru this process the best. It was the most stressful 5 months of my life. Please hang in there. Stay tough, but be willing to negotiate at the same time.

I really think that is key here. They hold the fear of foreclosure over our heads. When they realize we are no longer afraid and there are worse things that can happen than foreclosure...... Then they no longer have us by the B*lls. It's a liberating feeling.

Glad everything worked out for you.