Posted by River City on January 12, 2006 at 14:30:30:
The lender is not obligated to let the mortgagor do a short sale. The mortgagor has to get the lender’s permission to do a short sale. What do you mean “deeds ownership to a private lender?”
The first mistake someone can make is not talk with their lender when they are experiencing problems making their payments in a timely manner. Contact your lender, preferably in writing and by phone. Believe it or not, but lenders are not in the business to repossess homes. They do not have the manpower to maintain repossessed homes.
What kind of loan is on the home? Is it an FHA, VA or Conventional? FHA, VA, Fannie and Freddie all have loss mitigation requirements lenders are supposed to fulfill before repossessing a home.
Contact your lender ASAP, and good luck. It costs every tax payer in the US when people let their homes go into foreclosure.
if a buyer deeds ownership to a private lender to avoid foreclosure, can the lender still sue the buyer for any losses arising from the short sale of the property to a 3rd party?
unfortunately, i was working with another investor as a credit partner. she hasn’t held up her end of the bargain and i will not go into the rest of the new year with this hanging over my head. almost all of the escrow is gone and the house still needs about $15k in repair. i need to just cut all ties to this house. what should i do?
Re: deed in leiu of foreclosure - Posted by Brian (UT)
Posted by Brian (UT) on January 16, 2006 at 09:25:07:
Kenn
I’m a little confused. You say buyer deeds to private lender, and you say escrow is almost gone. Do you own the place or not?
You can’t deed anything to anybody if you don’t own it. If you do own it you could deed it to the private lender with a deed in lieu of foreclosure if this is the lender that financed your purchase and has the right to foreclose. Of course the lender would have to agree to accept it.
If the private lender is just a potential buyer in this case you could sell or assign your deal to him if he wants it.
Actually we need a lot more detail, and a location to offer you better suggestions.
Re: deed in leiu of foreclosure - Posted by colvegas
Posted by colvegas on January 16, 2006 at 01:38:00:
I would not deed the property to your lender to avoid foreclosure since if you do and the lender can not sell the property for FMV you can be hit with what is called “debt relief” and that could be thousands depending on the taxable value of the property or a % of the debt relief your lender files to the IRS.
Any marketing costs on the property that are incurred they can hit you that also and interest due on the loan etc.
YOu can check with our lender to see if they will authorize a short sale they may not since I believe there are certain conditions that must be met to do so.
Check with your CPA on what that amount can be. Your credit also would be ruined with a foreclosure on your record.
Can you sue this person for non-performance in the contract…?? and hopefully you have some sort of written contract or agreement.
I know your feeling in a different way and I may have some options for you so feel free to call me at 702-400-7632.