Deed In Lieu of Foreclosure...Heaven Sent or Not?
Learn The Facts Before You Make A Mistake!
At some point during the foreclosure process many homeowners consider a deed in lieu of foreclosure, sometimes called 'cash for keys', as a resolution. There are many facts to be considered before making that decision. A delinquent homeowner needs to look at the facts: do they want to save their home, can they truly afford to make the payments, is there equity in the home, would it be possible to sell the home, will they owe taxes on the forgiven amount, will they owe the lender the forgive amount are some of the more common considerations.
If you want to save your home then a deed in lieu is not the option you should use to stop foreclosure. The loss mitigation department may have other options for you to stop foreclosure. If you can afford to make your payments then you should take a close look at what the lender has to offer.
If you determine that you do not want your home and think that a deed in lieu is your best choice you still have some serious considerations to look at. If you are not careful, or are not experienced at dealing with foreclosure, which most homeowners are not, you may end up giving your house back only to find that you owe the lender the difference between what you owed on the mortgage and what the home was sold for at a foreclosure sale. I am sure this is
not really what you pictured when you agreed to give your house back.
How You Stop Your Foreclosure Is An Important Decision.
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Another consideration is the ever present tax authorities. In certain circumstances you may end up owing income tax on the difference between what you owed on the mortgage and what the home was ultimately sold for at sale. You may want to talk to a tax professional to determine if you would owe tax or not. Better to be safe than sorry.
As you can see there are some pretty important issues that need to be dealt with before you agree to a deed in lieu of foreclosure. Your credit report will still have a negative and you will have to vacate the home once your agreement is reached with the lender. However, depending on your state's foreclosure laws, if you choose another alternative you could end up being able to stay in your home payment free for as long as one year before you have to move.
By choosing this other alternative, and saving your monthly payments during the year, you would end up miles ahead when the time came for you to vacate the house. So, as you can see, there are some pretty substantial issues to consider when you approach stopping foreclosure.
BackOnTracNow walks you through the process providing you with all the information you need to make a knowledgeable decision on how to stop your foreclosure. Let the pros with BackOnTracNow walk you through the process regardless of which way you choose to go. BackOnTracNow's proven system has been used by professionals to stop 1,000's of foreclosures and it can absolutely help you!
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