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I am Close to a Deed in Lieu Approval How long should i expect?

Discussion in 'Deed in Lieu of Foreclosure - Do You Need Help to ' started by MattyB5576, Sep 10, 2008.

  1. MattyB5576

    MattyB5576 LoanSafe Member

    I am currently waiting to hear whether I am approved for a deed in lieu from ALS. I submitted my packet on 8/15 and was told I will have an answer by 9/15. My situation is that I bought a condo in FL for 200,000 and there are 18 forclosures going on in the community and the lender has only sold 100 units with 140 being rented out. He is currently renting 2/2 condos for half of my $1600 mortgage/taxes/HOA fees. So my father and grandfather are both having major orthopedic surgeries OCt 6 and 23 respectively and my mother needs help taking care of both of them up in NH. I am a physical therapista nd feel it is my obligationto help her and them out. I can't afford to rent this unit and rent up north since mygrandparents live with my parents and I cant stay there. I have been trying to do a short sale for 8 months now with no interest and there are units in here priced at 70-90,000 on a short sale that arent selling. I am not late on my payments but i have no money in the bank and I really need to get out of this condo and get up to help my family so I am hoping they can agree based on my hardship letter. Has anyone had a deed in lieu approved by ALS or any other lender recently? What type of hit can I expect on my credit? How soon after will i be able to buy? Will I be taxed on the forgiven debt? I live in FL will they serve me a deficiency usdgement?
    All and any information is much appreciated.
    thanks,
    MB
  2. Dan Bailey

    Dan Bailey Senior Member

    Re: Deed In Lieu of Foreclosure with Aurora Loan Services-Need Advice

    Hi Matty, and welcome to the forum. Here is some info posted by Cat elsewhere on the forum:

    List of Non-Recourse Mortgage States and Anti-Deficiency Statutes
    In a non-recourse mortgage state, borrowers are not held personally liable for more than the home’s value at the time that the loan is repaid. The lender may recoup some of its loss through foreclosure. However, the lender may not sue the borrower for additional funds. If the foreclosure sale does not generate enough money to satisfy the loan, the lender must accept the loss.

    Each non-recourse state has its own anti-deficiency statutes that prohibit lenders from seeking judgments. In a few cases, anti-deficiency statues do allow lenders to collect a limited amount of money from the borrower (such as the difference between the debt and the fair market value of the property).
    Note that in some states (such as California) non-recourse laws apply only to “purchase money” loans (i.e. original home loans that are used to purchase property). Almost all HELOCs and home equity loans are considered recourse loans and lenders for these loans may sue borrowers to recoup loss. (Except in some cases where the second mortgage lender forces the foreclosure. See: HELOC Foreclosures). There has been some speculation that mortgage refinances do not constitute “purchase money” loans. However, there have been no cases to determine this issue one way or the other.

    Anti-Deficiency / Non-Recourse States
    Alaska
    Arizona
    California
    Connecticut
    Florida
    Idaho
    Minnesota
    North Carolina
    North Dakota
    Texas
    Utah
    Washington

    One Action States
    In some states, lenders are only permitted a single lawsuit to collect mortgage debt. This plays out differently depending on the state’s laws. In New York, for example, a lender must choose between the actions of foreclosing on the property or suing to collect the debt. The following states have some type of one action statute:

    California
    Idaho
    Montana
    Nevada
    New York
    Utah


    As far as credit is concerned:

    The affect on your credit from foreclosures, short sales and deed-in-lieus

    • Foreclosure or Deed-in-Lieu of Foreclosure
    Both of these solutions affect credit the same. Sellers will take a hit of 250 to 280 points. This means if a seller's FICO score before foreclosure was 680, it could dip as low as 400.
    • Short Sale
    The affect of a short sale on a seller's credit report is much less damaging. The ding on credit will show up as a pre-foreclosure in redemption status, Steep says, which will result in a loss of 80 to 100 points. This means a short sale with a previous FICO of 680 will see it fall to 580 to 600.
    Waiting Period Before Buying Another Home

    • Foreclosure or Deed-in-Lieu of Foreclosure
    Steep says a seller who wants to buy another home after foreclosure will end up waiting about 36 months before a lender will offer any kind of interest rate that makes sense.
    • Short Sale
    The good news for short sale sellers is the wait is much shorter before buying another home. "They can buy again in about 18 months at a good interest rate," says Steep.
    Short Sale / Foreclosure Deficiency Judgments


    The bad news is a seller could be subject to a deficiency judgment for the difference between the loan amount and the amount paid. In California, purchase money loans are not subject to deficiency judgments; however, hard money loans, equity loans and refinances are. Other states have laws regarding personal guarantees, which could also result in a deficiency judgment if the home owner is personally liable for loan repayment.

    The lender has sole discretion whether to pursue a deficiency judgment in those instances when the judgment is permitted. To determine whether a pending foreclosure or short sale is subject to a deficiency judgment, talk to a real estate lawyer.
    If you're a seller trying to decide whether to let a home go through foreclosure versus attempting a short sale, salvaging your credit is the main advantage to doing a short sale. But seek legal and tax advice before making that decision.

    Source http://homebuying.about.com/od/4clos...07SScredit.htm
  3. MattyB5576

    MattyB5576 LoanSafe Member

    Anyone Have Success with a Deed in Lieu of Foreclosure?

    I am just interested in knowing if anyone has had success with a deed in lieu of foreclosure? I am waiting to hear from my lender on their decision on Monday 9/15.
    If you have had success how did it affect your credit, how long did you have before you had to move out, and how did it affect your ability to purchase things with financing right after?
    If you havent had success then what was your next step? My condo is stillon the market but there is minimal interest in the hsort sale.
    thanks, MB
  4. Moe

    Moe Call 1-800-779-4547 Staff Member Loan Safe Mortgage

    Re: Deed In Lieu of Foreclosure with Aurora Loan Services-Need Advice

    Matty,


    Whether or not to accept the DIL would be up to the investor on your loan, so you will have to see what they say on Monday.

    On this forum there have only been two DILs given to members and they had found rentals after the DIL was accepted and they received the paperwork from the lender.

    Buying After After a Deed-in-Lieu of Foreclosure
    The waiting period is 4 years up to 7 years.
  5. MattyB5576

    MattyB5576 LoanSafe Member

    Re: Deed In Lieu of Foreclosure with Aurora Loan Services-Need Advice

    well its good to know that I would be able to rent after. My fiance is not on the mortgage so we could maybe purchase under her name but for now we need to get our finances squared away if approved. thanks
  6. MattyB5576

    MattyB5576 LoanSafe Member

    Why is answer for deed in lieu taking so long? Please help!

    I currentlu have my mortgage with aurora loan services. I have someone negotiating on my behalf and received an email from a representative at aurora that the deed application is in the negotiators hands after about 3 weeks of waiting and that it should take about 3-4 weeks for the whole process to go through. This was told to me on 8/18/08. It is not 10/14/08 and the person negotiating for me has only been able to get ahold of the als negotiator 2x via email. My negotiator placed a call to als and was told that he will receive a call back from a manager by Friday of this week. I am hoping that this manager will have an answer for me. Are the managers the ones that make decisions in terms of approving or denying a deed in lieu? It's been almost 60 days now and how long do these usually take to get an answer from someone? I have been trying to short sale a 200,000 mortgage for 96,900 with no offers so that isnt working to well.
    any and all advice is well received and appreciated.
    thanks MB
  7. MattyB5576

    MattyB5576 LoanSafe Member

    Anyone Negotiate with Aurora Loan Services for Loan Mod or Deed In Lieu of Foreclosure? NEED ADVICE!

    I have a condo in Naples FL that I paid $200,000. I have entered talks with the lender (Aurora Loan Services) about a DILF. I need to move back up north secondary to family medical reasons. My dad just had major surgery and so did my grandfather and now my grandfather has pneumonia as he is trying to recover from surgery. I have had the condo listed for a short sale on the advice of my lender over 6 months and we listed it for $96,900. The Lender just had a BPO done and the lender appraised it at $70,000. The contact at my lender said they have my application and are reviewing it. They said it was in the underwriters hands on 10/22 and takes about 2 weeks for a decision. I really need to move home to help my mother who is taking care of both my dad and grandfather but am waiting for a decision to be rendered by my lender. This whole process has been going on for over 3 months now and I wish they would give me some direction. I have had no offers on the short sale which has been listed over 6 months. I am current on my payments and have no surplus after each paycheck. I will never be able to afford to leave my condo down here and rent up north. I dont want to have to foreclose but family comes first in my book. I am trying to contact the lender before it gets to that point since i have a 5:1 ARM and they are renting 2/2 condos in my complex for $800 when my total mortgage, taxes, and HOA equal $1600.
    Anyone else in the same situation? How long do lenders take to give you a decision? Have lenders been willing to allow deed in lieus in situations like mine? Has anyone had any recent negotiations with Aurora Loan Services? I know it will affect my credit but I am contemplating just foreclosing and walking away and beginning to repair my credit because I feel like I have no other options. Any and all advice is much appreciated.
  8. MattyB5576

    MattyB5576 LoanSafe Member

    What happens with DILF at this point in the Negotiations?

    I have gotten through to the underwriter who states my lender took out MI on my loan. He has now sent the application to the MI company and we are awaiting the approval/denial of the MI company. The underwriter said that we are in the final stages of the process. He also told me that they may look for some type of contribution via a payment plan. He told me this usually takes 3-4 weeks to get an answer from the MI company so we are nxiously and patiently waiting.
    Anyone have experience with the MI companies? How often do they approve these DILFs? Do they only insure 20% of the loan if I was financed at 100%? The only other option is for me to go in foreclosure since I need to move for family medical reasons.
  9. jdett

    jdett LoanSafe Member

    Re: What happens with DILF at this point in the Negotiations?

    FHA guidelines is 3 years after foreclosure.
  10. MattyB5576

    MattyB5576 LoanSafe Member

    We've been working on an approval for a deed in lieu since June. I had to move home for family medical reasons. Initially the underwriter said i need the approval of the Mortgage insurer and once he receives that then it goes to the investor for approval. We have gotten the approval of the MI company and are now just waiting to see if the investor will approve it. The underwriter initially told me that this is the last step and is more than likely just a "blessing", which i am hoping is true. Has anyone gotten this far and if so how long does it usually take? The underwriter told me no longer then 7-10 days. I havent missed a payment at all throughout this whole process.
  11. Idahoinvester

    Idahoinvester LoanSafe Member

    Hi Matty, I noticed the date on your post as 2009 and am wondering what your outcome was? I am in the exact same position with BofA on DIL. Negotiator says it will just take a few weeks for Invester to review and approve or not then you will just have weeks to move...We just missed our first payment as we were told that good credit would hurt the approval and we don't really have any credit to fall back on anymore...used savings and the rest. Can you let me know the rest of your story?

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