How do you offer a DIL if you have 2 mortgages?

[Lue]

Hi all. I live in Colorado and my Chapter 7 bankruptcy was discharged under the "old" law around 2 years ago. I never reaffirmed my 1st and 2nd mortgage but remained current on the mortgage until 1 month ago. I am unable to sell or rent the property and have elected to rent a more affordable place.

My question is this....I know that I am not liable for any deficiency, but would like to offer a Deed in lieu of bankruptcy. Do I offer a DIL to the first mortgage holder, or both. How does that work? Can you do a DIL with the first, inform the second that the first now holds title, etc? OR offer DIL to both? Help!

Any help/advice with approaching mortgage holders about a DIL would be appreciated. I am paying the HOA fees, insurance and taxes until foreclosure is finished, and it is killing me. I would like to get the process over quicker, and am going to take a hit on my credit again with either a foreclosure or a DIL. In Colorado, they publish the foreclosure for 5 weeks and that is so humilating. I have finally got back on my feet, but realize that after a good effort I can not sell or rent this property for what I owe, and it is best that I surrender it and move on as quickly as possible.

Thanks so much for any advice. This forum and all of you have helped me feel a little bit more human and get over this dark period.

Lue

[HHM]

I would think you would need to offer a DIL to both, since both the 1st and 2nd mortgage holder have an equal right to foreclose.

There is no harm in asking...call them both up and offer the DIL. But realize, you can't force them to accept a DIL.

[spell]

Where is this property located?

Unless the same lender holds both mortgages, DIL isn't an option.
What is an option is a Short Sale. Sell for what you can, ask the lenders to accept the offer.

How much can you get a quick offer for?
How much is your 1st mortgage? 2nd mortgage?
What repairs are outstanding?

Basically, if it forecloses, your 2nd mortgage gets nothing, if you can sell quickly to cover the first and give anything to the 2nd, they'll jump at the deal. If it's worth less than that, negotiate with both of them.

[yeahdischarged]

If this property was discharged in the bankruptcy, you didn't reaffirm, don't you legally owe nothing on the property? And wouldn't it then be illegal for the creditor to report any activity on your credit report? I would check with your attorney quickly.