Do not qualify for Deed in Lieu

[mooli7dm]

Hi All,

This is my first post here and I hope this is the right place to post this question.

I am trying to do a deed in lieu with Countrywide and after having spent some fair amount of time on the phone with them, I have been told that I do not qualify for a deed in lieu. I qualify for a short sale but not for a deed in lieu.

Does anyone know why this may be and if there is any way I (or with the help of an attorney) can still get them to do a deed in lieu?

If it helps answer this question, I have 30 year fixed FHA loan. I was kind of hinted on my last conversation with them that I may not be qualified because this is an FHA loan and since the government would insure this loan, Countrywide does not have to take a loss on the loan. Is this true? If it is true, why would they be open for a short sale?

[The Professor]

My sense is you are correct in suggesting that the unwillingness of CW to take back the property by way of a deed in lieu is correct. Since they will be made whole after completing the foreclosure through the default mortgage insurance (MMI) that is in place, there is simply no incentive for CW to do anything other than foreclose.

Take care,

Daniel