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What's the difference between Deed in Lieu of Foreclosure, and just a normal foreclosure???

Discussion in 'Deed in Lieu of Foreclosure - Do You Need Help to ' started by chcktychna, Jan 14, 2011.

  1. chcktychna

    chcktychna LoanSafe Member

    So, I feel really stupid, but after reading a kazillion posts, I don't get the difference. How do I take control of my process and get a DILF? What are the benefits of doing so? Is the timeline different? Do I need to contact my lender (3 months late, Wells Fargo, Oregon)?
  2. Michael Nazarinia

    Michael Nazarinia Michael Nazarinia - Mortgage Expert 619-379-0654

    Tell your bank you want to do a Deed in lieu....Any Customer service repo should guide you.. you might even want to do a short sale... do you know what you qualify for?. or the options you do have?

    make sure you have all your options in front of you before deciding...

    3 months late is nothing!!!..... you should just be getting a notice of intent to accelerate.. the old timeline was 30-60-90-120 days your gone out of your home more like 12-14 months now with allt he foreclosures and Shortsales going on...
  3. chcktychna

    chcktychna LoanSafe Member

    Well, I guess I thought I had it all figured out... guess not. :)

    Owe $185K (tiny, busy street, half-way remodeled 1923 house in a crappy neighborhood) and don't think I could sell it for more than $120 right now.
    Make $72K/year but I pay $1000/mo in school loans, so I'm totally strapped every month and never have any left over for savings or any kind of cushion, nor am I contributing to any type of retirement plan even though I should be (35 years old).
    I received a loan mod after 9 grueling months of the back and forth, lost paperwork run-around, but it only lowered my payment $120/mo, so it it doesn't really solve my problem. I would have to wait 5-10 years for this place to get back to where it needs to be, and it needs a roof, has a pretty bad mold problem, and the remodel was halted mid-stream when I had a serious injury/needed surgery, etc. I'm still struggling every month to pay my bills and I'm a lucky one compared to most...

    I have made the decision to walk. I don't think short sale will work at all. It's the deed in lieu option I don't understand.
    What qualifies a person for such an option? Are you just saving them time or something, so they don't report a foreclosure on your record? I don't get it.

    2nd, so are you saying that I SHOULD, yes, contact the bank and tell them what I'm doing and that I want a deed in lieu? Will sharing that with them bite me in the butt later? What are the consequences for telling them this?
    (thanks for any info you can contribute)
  4. chcktychna

    chcktychna LoanSafe Member

    What is a Deed in Lieu of Foreclosure? - loan.com

    Ok, so I read this. It is a nice summary, but still doesn't give enough information.
    It sounds like banks will still charge you with a deficiency if what they end up selling it for is less than what was owed on the house, or that I could be taxed for the difference as it would be considered income. I don't like that.

    What do you guys think? How likely is it that WF would even want to do this on my home given the numbers, and since it still impacts my credit, is it worth it? Will this speed up my process? Can I request this option later? Like after they give me a notice of intent to foreclose but before the notice of trustee sale?

    Truth is, I need to save up a little more money first and pay some debt off before I'm kicked out of here, but no, I don't want this to drag on for a year. I want to be able to move on with my life in 6-8 months or so.

  5. shannon1

    shannon1 LoanSafe Member

    I am also in Oregon and dealing with Wells Fargo. I was told DIL would mean wells fargo would list the loan as satisfied and not attempt to collect the difference. It would be the end of it. That being said my experience with them is they lie or mislead a ton. Also they are telling me the credit impact is not as bad with DIL because I am voluntarily giving up my home as opposed to being forclosed on. One of the guidelines is your home must have been on the market for 90 days. We have been attempting a short sale since Sep and stopped paying in July. You send in all the same info for DIL as you do for short sale, it actually is faxed to the exact same number. Good luck with Wells.
  6. jcltw

    jcltw LoanSafe Member

    I am in Oregon also and have Wells Fargo. I met with an attorney and was told that because I have PMI, the Insurance Company has to sign off on the deal also. Generally they want you to sign a promissory note for a large sum of money. Since Oregon is a non-recourse state for primary owner occupied residences, I just decided to stop paying and let it go to foreclosre. I haven't paid since September. Was told I would be in acceleration on Jan 18th, but haven't got the notice yet. My attorney also said if they offer a DIL have him look over the paperwork, because they will try and get more money. Hope this helps. I know exactly what you are all going through. I can't focus on anything else until this whole thing is over. Hopefully by the end of the summer.
  7. jcltw

    jcltw LoanSafe Member

    Update to my prior posting. The letter I got saying I would be in acceleration was my notice. The bank keeps calling and asking about modifications, I told them I was not going to be able to keep the house and they said that the notice of default should be coming soon. Looking ofrwrad to it.

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