Contemplating Deed-in-lieu in NJ ....ADVICE NEEDED....Desperate, fustrated homeowner

[rubyshinec]

Hi All,

Thanks ahead for the time to offer your advice.

I am in a very desperate situation right now. I purchased a home back in 2004 which has given me nothing but headaches since the very beginning. I have lost way over $60K of my savings on this house. I have placed the house on the market several times(even when the market was well) with no success. The house has been on the market for months now to try and do a short sale but not one offer has been made. I am now facing foreclosure procedures. I call the bank everyday to see if they have a sell date, thank God nothing yet.

I really don't care about keeping the house at all I just want to get rid of this stupid house and be able to work on my credit as I go. I am way behind on payments, but my financial situation is not bad at all, I'm working and don't have a problem with that, I just can't keep digging out of the little savings I have to keep paying off this house.

I have seriously been contemplating a deed in lieu, the problem is that I have two loans on the house, both with Wells Fargo. The 2nd loan, home equity, is currently charged off (therefore I now have a lien on the house) and the bank has offered me a 50% payment to cancel the debt, which comes down to $16K or so. Here is where I need advice on:

1 - Should I hold off on paying the settlement amount, hire a real estate lawyer to help me with the deed-in-lieu and see if the bank accepts to the deed-in-lieu
2- Should I first pay off the settlement amount and then hire a lawyer?
3 - Any other options of suggestions that you can throw my way will be more than appreciated.

Thank you all.

[SurfwhenUcan]

You don't need an attorney to do a Deed in Lieu, I don't think, although I am not an expert at NJ foreclosure law. If you have had no offers for several months, call and ask the bank for a DIL package. Your problem is going to be that you have to show clear hardship, and your hardship case does not sound that strong. The bank does not want to just take back the house, in fact that, I think they prefer to foreclose - makes them not look so soft. Think about it - if they start looking like you can just give back the house and they won't put up a fight, how many other people are going to do the same thing. Remember, your bank is not in the business of Real Estate, it is in the business of Banking. Part of that business is collecting on delinquent debt, not repossessing collateral.

I think you will pay money to an attorney to do a DIL and very likely still end up with a Foreclosure. I wouldn't pay them anything up front - it they're so confident they can do it then they should have no problem taking fees upon completion. Be careful about the second - they could sue for deficiency even if the first forecloses. You should research your options, which include settling or BK.

[judithoo5]

how many payments are you missing?

[Angels]

I agree with the above poster, no real advantage to hiring an attorney to do the footwork for you. When I attempted my DIL with Wells they want you to list your property for at least 3 months before they will consider a DIL. Then, per your request, they will transfer you over to the DIL department. If you are receiving calls from Jessica you are not transferred so keep calling them until they do actually transfer you. Since the same bank has the 1st as your lien it may be easer for you to negotiate a smaller settlement on the second when you go through the DIL process. If you pay it off first then try to negotiate a DIL they may think you have more money then you actually dofficeffice" />>>
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In short, first contact wells and tell them that you are listing the property for a short sale. Then after 90 days contact them again and request a DIL package. Then bug the heck out of them after submitting it for the DIL approval.>>
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Hope that helps.

[rubyshinec]

Thank you Angels. Did you have any success with your DIL and if so how has this affected your credit?

I'm also thinking of going for a modification, but the reality is that I don't want to keep this house.