A deed in lieu of foreclosure is a document wherein a borrower or mortgagor conveys to a lender or mortgagee the rights to a real property. This is done to satisfy a defaulted loan and prevent foreclosure proceedings.
There are many advantages in a deed in lieu of foreclosure, both to the benefit of the mortgagor and mortgagee. The main benefit the mortgagor or borrower gets is instant relief from all or most of the indebtedness he or she has due to the delinquent loan. The mortgagor also prevents him or herself from being associated with the negative effects of involvement in foreclosure proceedings.
The mortgagor may also be able to take advantage of better terms, as opposed to a formal foreclosure process. The lender or mortgagee may gain in significant ways as well, as the effort, time, and cost of repossession will decrease. There are also more benefits if the borrower declares bankruptcy.
If a borrower is unable to pay for the mortgage, but cannot sell the property or restructure payment plans, he or she may choose a deed in lieu of foreclosure. Here, the mortgage company or lender is given the ability to put the property up for sale to salvage the balance of the loan.
Is credit score affected by deed in lieu of foreclosure?
A deed in lieu of foreclosure can make a negative impact on credit score. An individual may lose 250 or so points with this. The credit report will reflect the deed in lieu for seven years, although a borrower can still rebuild his or her credit. However, the ill effect on the credit score gradually lessens in time. An individual may request its removal from a credit report towards the closing of year seven.
I’m currently working with national home savers pro and have a loan through wells fargo. We are 12 months behind but have started making monthly payments. they keep turning us down for a repayment or loan modification but then tell us to reapply. National home savers pro is giving me different information then wells fargo and I’m about to have our 5th child in a week. My husband works over seas in Iraq as a contractor for the military and we can afford the payments now but not the 16k or so we’re behind. Do you have ANY suggestions for me? who should I be trying to work with or listen to wells fargo or national home savers pro? I really do not want to lose my house!
we have a fixed 6% va loan that we pay taxes and home owners through 30 year fixed, originated in aug 05, 0 down and we owe 158k on it.
martina holmes(Quote) (Reply)
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You should contact (NACA) look this up on the web , the company binding contratcs with wells fargo to redo your loan.
Lanchee(Quote) (Reply)
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I am working with Mrs. Homes on the loan modification. At the moment the loan is under review for assistance and the negotiatior on the file has contacted us regarding the process and stated that the clients are under review for a lower rate and monthly payment. The last note stated that the client spoke to collections that had no notes from loss mit dept and just tried to collect a fee.
Isabell NHSP(Quote) (Reply)
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We contacted Martina Holmes Lender and confirmed the lender would not approve the loan modification because the homeowner did NOT meet the guidlelines to get approved for any program. National Home Savers Pro did not collect 1 cent up front and worked diligently to get her approved for ANY assistance. Once denied we explained the situation to the client and never charged for any of the work.
We care about our clients and want to make sure we assist in this process and not break any homeowner.
Thank you
Isabell NHSP(Quote) (Reply)
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I have a mortgage with Litton Loan Servicing. About 1 1/2 years ago I was having some difficulty paying all my bills. So I called all my creditors and to my surprise they all had options to help me, including my mortgage company, Litton. I never told Litton that I could not pay their bill. I was just looking to see who could help. They encouraged me to apply for a HAMP modification. After several months I got accepted into the trial modification period. I asked them what that was. They said it was the final step that takes no more than 4 months, just make your payments on time and you will be fine. I thought all was well. I made on-time payments. I stayed in touch like they asked. After 7 months of timely payments I called them as I often did to check in. Finally, after 7 months, they said I was denied for some unexplainable reason and owed them $3000 and that my home was in default!
What kind of help is this?
I could have paid my full mortgage and not ended up in this debt. I do not understand how this is considered help. I have been paying hundreds each month in credit card bills. Meanwhile, my mortgage company is reporting me delinquent. I was worried about my credit when I should have been worried about my house. I could have easily paid my full mortgage. I cant live in a little plastic credit card. Who came up with this plan to help people?
I have spoken to dozens of people, mostly couselors and loss mitigation reps, some nice, some not. None of them suggested that I consider saving my house and not my credit cards! I don’t know who to trust anymore.
The best part… The loss mitigation side of Litton is promising to resolve the mistakes and get me a modification BUT the original mortgage department side of Litton has been pursuing foreclosure and has now told me that my loan is being sold to Green Tree Servicing on January 1st. Green Tree is the company that’s being sued for killing someone with harrassing phone calls. I don’t expect they will work with me and make it all better.
The only thing i have learned is that LOAN MODIFICATION is a 4 letter word. Its not about getting into the process, it’s about getting out of the process. Wish I knew that ahead of time. Anyone trying to make money by convincing people that Loan mods are a good idea are worse than the predatory loan servicing companies.
Either we get help as home owners or we don’t want anything from any of you!
How in good faith can a loss mitigation department or other company allow an application to be submitted that doesnt have a 99% chance of being accpeted if the guidelines are given ahead of time?
Laywers and bankruptcy are the only solutions as far as I can see until the day of reckoning when a class action suit fixes it all for all the victims including me.
stressed home owner(Quote) (Reply)
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