Deed in Lieu... POST Discharge???

[TheBrokeCouple]

Okay...strange things are happening here.

We could use a little help.

We recieved our dicharge in July. We are letting the house go back.

Last week, the mortage company called us and offered to take a deed in lieu instead of going through the forclosure process.

To do this, they want us to give them a hardship letter, last two paystubs, copy of bank statements for the last two months and they will wave the fees to do so. The stay has been lifted already.

Our question is...is there really any benifit to us to do it this way...other than just getting it out of our hair. They were talking like it would take 8 or 9 months to go through the whole foreclosure process and the deed in lieu would be much quicker.

I didn't think that it would matter on our credit report because whether it's deed in lieu or forclosure...it will still say "included in bankruptcy"...am I correct? Would we still be able to sell the property? Is there any benefit in doing so at this point....I"m sure the best we would be able to do would be a short sale anyway. Plus, we believe the house to contain mold, and we would not want that as a liability on our parts for selling it either.

We were just kind of dumbfounded that they called us to even discuss this after the fact.

Any thoughts?

Thanks so much,

TheBrokeCouple.

[BKParalegal]

You are most likely in a judicial state, where it costs thousands of dollars and months for the lender to foreclose. Doing the Deed In Lie saves them money and time, but since your BK is done, they can't report either DIL or Fclsre on your credit report. Call them back and see if they will pay you $2,000 to do a DIL, they will be spending 4 to 5 times that to foreclose.

Good Luck

[RK05]

The deed in lieu will get your name off of the deed/title faster than the foreclosure. You are still technically responsible for keeping the grass cut. So this could mean fines for you if you don't keep it up until the house it out of your name.

[BKParalegal]

RK, if I am not mistaken, he surrendered the property in BK, so the obligation of the grass cutting et al, is on the bank not him.

Good Luck

[RK05]

RK, if I am not mistaken, he surrendered the property in BK, so the obligation of the grass cutting et al, is on the bank not him.

Good Luck

If that is true that is great because my girlfriend plans on surrendering her house. I've just heard though that until your name is off the deed that you were still responsible.

Lets hope your answer is the correct one!

[sharksfan]

RK, if I am not mistaken, he surrendered the property in BK, so the obligation of the grass cutting et al, is on the bank not him.

Good Luck

OT... I took a drive by my BK'd house yesterday... the weeds in front are as tall as the top of the first story windows.

[ThreadsSnapping]

RK, if I am not mistaken, he surrendered the property in BK, so the obligation of the grass cutting et al, is on the bank not him.

Good Luck

The BK remove his liability for the loan, it does not take his name off the deed. He is still the owner of record at the local courthouse and will be until the house is forclosed upon and the deed is transfered to the bank. Hence, if the city/county were to impose any fines for lack of upkeep they would go to you. They may get transferred to the bank after forclosure but they do impose the fines and send the tickets to the current owner of the house.

Some places also place a lien against the house if they are not paid and the lien would just get transferred to the bank upon transfer of the deed as the lien is against the house itself.

TS

[Help!]

OP, I'm glad you started this thread. We're in exactly the same situation. I like the idea of getting our names off the deed, but I don't like the idea of giving financial docs. to the lender. The way I see it, I'm doing them a big favor and they have no reason to require these things.

As for selling, we had a short sale offer. We didn't realize that we'd have to sign all the same documents with the same liabilities any other seller would have (we thought we only had to accept the offer). As much as we wanted to be done with this house, it seemed really foolish to me to sign papers that make us legally vulnerable if something goes wrong with the sale. I also don't trust the bank and had visions of some lawyer finding a way to make us responsible for part of a deficiency or some weird closing costs, etc. We're willing to sign over the deed, but that's all. After working so hard for this fresh start, I'm not signing my name to anything!

[BROKENN]

Hi Help! I don't blame you... just a little **broken** eh? I think we all are.....

Good posts, I too am hesitant to sign anything without 50 questions and a lawyer.

[ThreadsSnapping]

I would tell them to take a hike and let them go through the forclosure process. You're giving up the house regardless and have no further liability for any of their costs so what difference does it make to you what it costs them or how long it takes. They want to save money but are making you jump through hoops for their convenience?!?! I do like the idea of telling them you will sign the deed over for cash. I wouldn't jump through any of their hoops.

TS

[wtu]

I wouldn't do it if it involved giving them any more personal information or even consider writing a letter. Hello, I just went through bankruptcy because I was insolvent and I am giving up my house...what more information do you need to prove that I went through a hardship.

I'm sorry, but mortgage companies infuriate me. They went to the government for a bailout and are crying, but if you approach them they want to play hardball and not give you a break or any sort of really workable solution at all. I know they are in the business to make sure you get your payments in (and trust me I was continuing to send them money), but if you are truly willing to work it out and they offer non-solutions...well what do you think is going to happen? I'm not placing blame, my personal situation is nobody's fault but my own, but I ran into dead ends with every company, every time I tried to negotiate with them. Other people didn't get the same response as I did...It is a frustrating time to be an American citizen, I tell you.

[No Gravy]

I would tell them to take a hike and let them go through the forclosure process. You're giving up the house regardless and have no further liability for any of their costs so what difference does it make to you what it costs them or how long it takes. They want to save money but are making you jump through hoops for their convenience?!?! I do like the idea of telling them you will sign the deed over for cash. I wouldn't jump through any of their hoops.

TS

Took the words right out of my mouth. Errrmmmm...fingers.

I would hold out for a "cash for keys" offer. If not, let the lender take 8-9 months to foreclose and spend $50k to do so.

[No Gravy]

I wouldn't do it if it involved giving them any more personal information or even consider writing a letter. Hello, I just went through bankruptcy because I was insolvent and I am giving up my house...what more information do you need to prove that I went through a hardship.

I'm sorry, but mortgage companies infuriate me.

What I like is that my lender went bankrupt themselves! You'd think they (as a corporate entity) would be a little more understanding. But no...