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About a deed in lieu of foreclosure.

If I Call the lender and inquire about a deed in lieu of foreclosure. what happen to 2nd loan in the house(diff lender). What is better if house have 2nd loan, floreclosure or short sale or deed in lieu floreclosure. what is better option if you can't not longer afford payment for house.
House value 250K
1 mortgage 163K
2nd loan    86K
  • January 29 2009 - Orlando
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Answers (3)

With two loans on the property a deed in lieu will be a tough sell to the lenders.  Which ever lender accepted the property they would still have the obligation of the other loan.  Look into a short sale with a local Realtor.  The first lender will have little interest in discounting their loan, the lender in second position will be the one that may settle for less.
  • January 29 2009
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because loss of income  I can't not longer afford house
  • January 29 2009
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Orlando1847,

What transpired that you no longer can afford a home now as opposed to when you acquired the home? The real question is what is your motivation to abandon your home?

On the surface, the short sale would not be an acceptable course for the lenders based on the fact that you have a 65% loan-to-value 1st lien&35% loan-to-value 2nd lien. It does not appear that you have negative equity like many of the homeowners who have been forced into the foreclosure process.

If you choose to pursue any of the options that you mentioned, your credit could be ruined for many years to come. This would affect your ability to not only buy a home in the future, but also for any other type of credit.

Call Fannie Mae to speak with a home counselor so that you can discuss your real options immediately.
  • January 29 2009
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