Foreclosure in 33157>Question Details

Vanessa, Home Buyer in Miami, FL

I own 2 homes but can no longer afford to make payments on both, would a "deed in lieu of forclosure" be a viable option?

Asked by Vanessa, Miami, FL Tue Jan 10, 2012

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14
This question should be asked to a legal expert before you take any action. Some of your options are Deed-in Lieu, as well as possible short sale and the last resort is foreclosure by the bank. I try and explain the difference between the three like the different degrees of a burn. No burn is good, but First Degree is better then Second Degree Burns, and Second is better then Third.

So the worst thing for you credit is a foreclosure so that would be like Third Dregee Burn that are deep burns with charing and could lead to loss of life. So that why I say that Foreclosure is a last resort.

Deed-in Lieu is more like a Second Degree Burn , lees chance of loss of life but still serious. The deed-in-Lieu will effect your credit but not as bad as a foreclosure. It shows that you were willing to work with the bank and turned things over to the bank in good condition, and the bank had lees expense in not having to foreclosure.

The Short Sale option is the best for everyone in that you work with the bank to sell the property and assit the bank in getting new owners. You may or may not get a charge off list on your credit. This offer will get the highest value in a sale, also meaning more paid off what is owed.

The last thing I want to mention is you said two houses, only one can be your homestead or primary residence. The second property will be looked at as Investment and could incur serious Tax Issues, and should speak with a tax professional before any action is taken.
0 votes Thank Flag Link Tue Jun 4, 2013
Give me a call I maybe interested in taking them off your hands. I'm a all cash buyer 305-283-0525 - Mark
0 votes Thank Flag Link Sun Apr 22, 2012
Dear Vanessaa,

You have a few options. I think a shortsale might work. Some lenders are offering insentives. Please contact me and we can discuss your options.

Maria Jose Donoso 786 237 8882
0 votes Thank Flag Link Sun Jan 22, 2012
Dear Vanessaa,

You have a few options. I think a shortsale might work. Some lenders are offering insentives. Please contact me and we can discuss your options.

Maria Jose Donoso 786 237 8882
0 votes Thank Flag Link Sun Jan 22, 2012
HI Vanessa,

I might be able to help you, please, send me an e-mail with property addresses and monthly payments.
Thanks!
0 votes Thank Flag Link Thu Jan 19, 2012
That is a great way to avoid foreclosure do note deed-in-lieu-of still has ramifications similar to foreclosure just less intrusive.

Ramifications of Foreclosure, Short Sale or Deed-in-lieu-of Foreclosure

Here are some of the ramifications of foreclosure, short sale or deed-in-lieu-of-foreclosure, there are many more like; insurance rates, your job (yes employers are checking credit records these days).

Your credit score will be reduced by 200-400 points, short sale and deed-in-lieu-of a little less 100-200 points.

All forms of foreclosure stay on your credit report for 10 years.

After you have gone through foreclosure, short sale or deed-in-lieu-of-foreclosure there will be what is known as the "waiting period", this period of time varies for each and can be reduced if you had some type of extenuating circumstances that caused the foreclosure:
Waiting Periods to Buy After Foreclosure – “YES” Short Sale and Deed-in-lieu-of are forms of foreclosure
• Buying after a Walk Away Foreclosure
The waiting period is 7 years
• Buying after a Foreclosure
The waiting period is 5 years with 20% deposit up to 7 years.
• Buying after a Foreclosure with Extenuating Circumstances
The waiting period is 3 years with 10% deposit up to 7 years.
• Buying after a Deed-in-Lieu-of Foreclosure
The waiting period is 2 years with 20% deposit, 4 years with 10% deposit up to 7 years.
• Buying after a Deed-in-Lieu-of Foreclosure with Extenuating Circumstances
The waiting period is 2 years with 10% deposit.
• Buying after a Short Sale
The waiting period is 2 years with 20% deposit, 4 years with 10% deposit up to 7 years.
• Buying after a Short Sale with Extenuating Circumstances
The waiting period is 2 years with 10% deposit.

In addition to the waiting period and minimum down payment, you will be required to have a minimum FICO score and the home purchase must also be the principal place of residence, not a rental nor a vacation home.

Lastly, most loan applications will ask the dreaded question "Have you ever been foreclosed on?" this stays with you for life, many think that because it will not show up on the credit report after 10 years they can answer "no", well lying on a loan application is a felony that carries a major jail term, so be aware.

Good Luck
Bob Patrick
Buy a home after foreclosure, short sale, deed-in-lieu-of or bankruptcy expert
Movin-On LLC
Helping families/people that have or will loss their homes get back into another in as little as 6 months
0 votes Thank Flag Link Wed Jan 11, 2012
Vanessa, it sounds like you have managed to keep up the payments until now. Why don't we list both of them for rent, and then whichever doesn't rent first can be removed from the market and you can live in that property. I think that we're starting to turn the corner here in South Florida, and if you could hold out a couple more years, you might come out ahead of the curve.

Information you should know: Your current balance on both loans, both payments plus taxes, insurance, etc., possible rent on both properties. With this you can run various financial scenarios, and maybe figure out the best way out of your situation.
0 votes Thank Flag Link Wed Jan 11, 2012
Good Morning Vanessa,

It is unfortunate that you find yourself in this situation but know that there is a solution for you. The strongest suggestion would be to talk to a real estate attorney and accountant/CPA first to determine what your rights and obligations are, in addition to what the possiblelong term financial implications this may have for you and your family. In addition, you will want to speak to the lenders for your properties to see what their procedures and requirements are. As stated here, most banks will want you to first place your home on the market for sale and attempt to do that as a short sale. There are many agents that are qualified and experienced in handling short sales and along with your accountant and attorney can assist you through this process.

Good luck on your solution to this very difficult situation. Please feel free to contact me if you should have any questions regarding the handling and processing of a short sale.

Lila Lopez
RE/MAX Advance Realty
CDPE- Certified Distressed Property Expert
305-772-2521
0 votes Thank Flag Link Wed Jan 11, 2012
Have you thought about renting the second home?
0 votes Thank Flag Link Wed Jan 11, 2012
You may want to talk to your lender (as well as your tax advisor and attorney) as a lot of banks will not consider a DIL unless you first attempt a short sale.
0 votes Thank Flag Link Tue Jan 10, 2012
This is not a question that can be answered here. You need professional advice. Many lenders require you to try a short sale prior to accepting a deed in lieu of foreclosure. Contact your CPA and attorney to see what is best for your particular situation. The IRS is changing their laws in 2013 which may affect your decision.

Good luck to you.
0 votes Thank Flag Link Tue Jan 10, 2012
Speak to a few Realtors experienced in short sales, an attorney and your tax professional. Another important piece to deciding whether or not to agree to a deed in lieu is what the agreement with the bank states you may or may not be responsible for.

Best of luck.
0 votes Thank Flag Link Tue Jan 10, 2012
At this point, I would recommend talking to your Tax man and your Attorney before decideing:
The Shortsale and the D. I. L. would have different tax consequences,
especially so, since Florida is a RECOURSE state.
This isn't something to base your decision on other's opinions.

Good luck and may God bless
0 votes Thank Flag Link Tue Jan 10, 2012
I would reccomend a short sale before a deed in lieu. You should be able to qualify since you are unable to make both payments. You should talk to a couple of Realtors who are qualified in your area. Be sure to ask for credentials and references. You can go to http://www.cdpe.com to start the search for one if you dont have one already.

Good Luck!
0 votes Thank Flag Link Tue Jan 10, 2012
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