Since my client and Regions Bank(2nd mtg.) could not come to agreement. We were not able to move forward with a short sale. Now Bank of America has offered them a Deed in Lieu. Should they look into this? This is a home that they are not living in right now it was their residential home 2 years ago. They moved to another home to be closer to the husbands job. He was let go for downsizing from his other job. What are your thoughts on this?
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DON'T GIVE UP!
Call Wendy. She offered to help you. Get help right now. Get whatever you need to do to make sure your clients do not give deed in lieu of foreclosure. It is as bad as foreclosure.
If your clients say that they do not care they most likely do not understand the difference between deed in lieu of foreclosure and short sale and implications that deed in lieu on foreclosure will have on them.
You reminded me about the hidden costs of bad credit - you pay more for everything that you buy with credit and you pay hundreds more over the years for car insurance as your credit gets better. I assume that there are other hidden costs where you pay more. The car insurance really floors me -- this stuff should be pointed out to the sellers - something closer to home like buying their groceries, driving the car and kissing off thousands just 'cause. It is just if you feel like buying another house in 10 years...
DIL....the most discussed option that rarely occurs.
I think BofA can acquire without release from the 2nd, btw (at least in CT), if they are willing to acquire the obligation for the 2nd, or can negotiate for the release.
In my experience, often when my client thinks they are being "offered a DIL", it just doesn't happen. Do you have the offer in a formal agreement? Somehow, the Investor just does not want the house.
Agreed with Wendy. Keep trying, changes are the SS is still more likely than the DIL.
There is only 1 thing worse than a Deed in Lieu and that is a foreclosure - and not by much. A DIL is just an agreement so no liens get wiped like a foreclosure. As mentioned, that 2nd bank needs to be dealt with (your client dealt with the 2nd? Ever hear a quote about being your own lawyer?).
A BK is better than a foreclosure on your credit, so it looks like the choices are to BK then deal with the 2nd after their threat to the sellers has gone to $0, find a buyer who can pay enough to make the 2nd happy or find someone who can aggressively deal with the 2nd. Ugly. My thought is that you look for a buyer to put $$ into the 2nd and you probably didn't have a good negotiator talking with the 2nd. That is one of the reasons realtors and attorneys hire my company - it can be difficult to impossible.
Also, if you call BOA SS dept, ask what they might have as a cooperative program - assuming that you can eventually handle that 2nd. You might find someone better to deal with at BOA, but more important, any short sale is way better on the seller's credit than the DIL or foreclosure.
I have had experience with this. We did a deed in lieu of. The 1st lender required the 2nd to be handled. We paid a small amount to get the 2nd to release the note. It was better than the foreclosure. In hindsight I would have rather we did a short sale from the credit stand point.
Lisa - The seller cannot do a "deed in lieu", i.e., allowing Bank of America to reposess and take ownership of their property, without Regions releasing its lien. Keep working on Regions! I've sold many Regions short sales on the Emerald Coast. Get creative. See if the lien can be moved to another property. Try combination of cash contribution and promissory note. In my experience, Regions want to make this work. Good luck.