Deed in Lieu of Foreclosure - costs $$$ ?

[Boscoe]

Has anyone heard of this?
I got discharged from my bk in October 2007. In order to get one of my discharged mortgages out of my life, I asked the bank to do a DIL. They agreed finally, but I was to pay closing costs of $4k!
I don't think so!!!!

I thought the DIL's were "sign the papers" and move on. No cost to me.

Anyone else heard of this and what are your experiences?

[uofaguy]

Hey Boscoe -

Wow, that is odd - but at this point nothing surprises me with the banks. We attempted to short sale a home and after numerous conversations with the bank were thrilled that they accepted the short sale . . . until we read the fine print in which they reserved the right to seek a deficiency judgment against us (kind of defeats the purpose of a short sale, right)?

We went round & round with the bank & they refused to remove the deficiency language - so now the home is included in our BK. I'm curious if anyone else has had a similar experience to yours (as I may be there soon myself)!

Hope all is well.

[FreshLikeADaisy]

Boscoe, was that mortgage not discharged in your Ch7? If it was, they had no business going after you at all, so maybe I'm missing something...

But I will tell you this: my lender, Countrywide, was one of the most disorganized companies I have ever had to do business with. And now they're desperate. Add all that together, and uofaguy is absolutely right: they'll do anything under the table, but otherwise refuse any act (like a short sale or deed in lieu) that would actually keep it from being a foreclosure.

I'm actually starting to wonder, because the mortgage industry is such a POWERFUL lobbying force, whether the higher ups are *actually* unmotivated to do anything to prevent foreclosures -- beyond superficial gestures -- because they expect the taxpayers to bail them out en masse within the next year or two in order to avoid economic meltdown.

Like the savings and loan scandal in the 80's... on crack. If you look at it that way (feel free to disagree, of course!) it is actually in their favor to *increase* the number of foreclosures and not decrease them, because whatever aid comes their way is most likely going to be calculated on the number and dollar amount of foreclosures, and if history is any indicator, I think it's safe to say the aid will go directly to the banks, not the homeowners.

The banking industry has fought and fought and fought for deregulation, and every time it received deregulation there was a huge scandal and crisis that followed, and then a bail out. This subprime business strikes me the same way, because deregulation was supposed to have been replaced with *self-regulation*. Self-regulation means that the industry itself takes steps to prevent crises, like -- oh, I dunno, stop predatory subprime lending and put a cap on the torrent of foreclosures that are occurring right now but are preventable IF the lender takes simple steps to assist the homeowner -- but they're not. They're talking, but not doing much, and this has been a growing problem for what, two years now? It's not like no one knew what was going to happen, and they had no idea these ARMs were going to become due.

So like I said, maybe they're expecting a bail out, in which (hypothetical) case it is not in their best interest to work with you very hard to prevent your foreclosure. But this I know for a fact: what that customer service guy says to you on the phone, and can do in your behalf, comes from the very top. They know exactly what they're doing, and how far they're letting their people go to work with a homeowner. That alone speaks volumes, at least to me.

Off my soapbox now, sorry.