Deed in lieu or foreclosure -- 2 lien holders

[JohnDoesdoe]

State of MA

Am I better off going to foreclosure OR negotiating with the junior lien holder to lower debt and then granting a deed in lieu to the senior holder?

Which has the least credit impact or is it the same?
Which is likely to cost me the most?

Thanks for any advice…

[seniorjudge]

Originally Posted by JohnDoesdoe

State of MA

Am I better off going to foreclosure OR negotiating with the junior lien holder to lower debt and then granting a deed in lieu to the senior holder?

Which has the least credit impact or is it the same?
Which is likely to cost me the most?

Thanks for any advice…

Q: Am I better off going to foreclosure OR negotiating with the junior lien holder to lower debt and then granting a deed in lieu to the senior holder?

A: If you have any equity at all in the land, can you sell it? Can you work with the lenders on allowing you to sell instead of either of these alternatives?

[JohnDoesdoe]

State of MA --

I do not have equity and have had the home on the market since 4/05. The last price was under what I owe and I have had no offers.

[HUD-1]

I think you should try a short sale with the lender first (negotiate the secondary debt and pay off less than owed for a full satisfaction.) You could then try a DIL if you can't do the short sale. The credit impact will be similar to a foreclosure, but you will be "doing the right thing" by working it out and will probably feel much better about it by taking an active role in the resolution. Also, secure in writing a promise that they will not seek a deficiency judgment. If you simply let it go to foreclosure, they can hound you for the difference.

[JohnDoesdoe]

MA-

What happens during the forclosure to the Condo association? i REPRESENT 50% of the assoication as the property only has 2 units on it (detached single family homes that are called condo's because the property is a 'condo').

I guess I could pay 6 months of HOA dues in advance to ensure that I do not bring extra concern/burden to the owners of the other home/unit.

Thanks,

John

[HUD-1]

Looks like MA has a priority lien law for condos. up to 6 months of fees is covered, plus some legal fees:

(c) When any portion of the unit owner's share of the common expenses has been delinquent for at least sixty days subsequent to April 1, 1993, the organization of unit owners shall send a notice stating the amount of the delinquency to the unit owner by certified and first class mail. The organization of unit owners shall also send a notice stating the amount of the delinquency to the first mortgagee by certified and first class mail, provided, that the first mortgagee has informed the organization of unit owners of its name and mailing address. Furthermore, thirty days prior to the filing of an action by the organization of unit owners to enforce its lien for delinquent common expenses, the organization of unit owners shall send a notice stating its intention to file said action to the first mortgagee by certified and first class mail, provided that the first mortgagee has informed the organization of unit owners of its name and mailing address. In the event of the appointment of a receiver for the condominium pursuant to the provisions of chapter one hundred and eleven, the lien for charges imposed for the payment of expenses incurred by the receiver shall have priority over all other liens and mortgages, except municipal liens.

A lien under this section shall be enforced in the manner provided in sections five and five A of chapter two hundred and fifty-four. Such lien is prior to all other liens and encumbrances on a unit except (i) liens and encumbrances recorded before the recordation of the master deed, (ii) a first mortgage on the unit recorded before the date on which the assessment sought to be enforced became delinquent, and (iii) liens for real estate taxes and other municipal assessments or charges against the unit. This lien is also prior to the mortgages described in clause (ii) above to the extent of the common expense assessments based on the budget adopted pursuant to subsection (a) above which would have become due in the absence of acceleration during the six months immediately preceding institution of an action to enforce the lien and to the extent of any costs and reasonable attorneys' fees incurred in the action to enforce the lien, provided however, that the amount of attorneys' fees incurred prior to January 1, 1993 which shall be prior to the mortgage described in clause (ii) above shall be limited to no more than two thousand and five hundred dollars, and provided further, that payment of the assessments with respect to such six month period, and to the extent of any costs or reasonable attorneys' fees incurred in said action, shall serve to discharge such lien to the extent that such lien is prior to such mortgages described in clause (ii) above. The priority amount shall not include any amounts attributable to special assessments, late charges, fines, penalties, and interest assessed by the organization of unit owners. The failure of the organization of unit owners to send the first mortgagee either the notice of sixty day delinquency of common expenses, as described above, or the thirty day notice of intent to file an action to enforce the lien for delinquent common expenses, as described above, shall not affect the priority lien of the organization of unit owners for up to six months' common expenses, but the priority amount shall not include any costs or attorneys' fees incurred in the action to enforce the lien. This subsection does not affect the priority of mechanics' or materialmen's liens, or the priority of liens or other assessments made by the organization of unit owners. Recording of the master deed constitutes record notice and perfection of this lien; no further recordation of any claim of lien for assessment under this section is required.

[JohnDoesdoe]

MA-

I have 3 loans with Countrywide. 1 which will go into default in MA and 2 that are on my residence in Nevada. Can countrywide take monies I pay for the Nevada mortgage and apply it to the MA loan, creating a situation where I have little control over which mortgage is in fact late.

Thanks,

[seniorjudge]

Originally Posted by JohnDoesdoe

MA-

I have 3 loans with Countrywide. 1 which will go into default in MA and 2 that are on my residence in Nevada. Can countrywide take monies I pay for the Nevada mortgage and apply it to the MA loan, creating a situation where I have little control over which mortgage is in fact late.

Thanks,

Is the countrywide loan all in one payment or are there three different loans?

If there are three different loans, I doubt that cw even knows that you are the same guy with three properties.

[HomeGuru]

Originally Posted by JohnDoesdoe

MA-

I have 3 loans with Countrywide. 1 which will go into default in MA and 2 that are on my residence in Nevada. Can countrywide take monies I pay for the Nevada mortgage and apply it to the MA loan, creating a situation where I have little control over which mortgage is in fact late.

Thanks,

**A: read your loan documents.

[HomeGuru]

Originally Posted by seniorjudge

Is the countrywide loan all in one payment or are there three different loans?

If there are three different loans, I doubt that cw even knows that you are the same guy with three properties.

**A: it is very easy. All CW needs to do is order a credit report and the lender's name, address and mortgage loan number will be there listed under the borrower's name and SS#. And the loan docs allow the lender to order a credit report especially of the borrower is in default.

[JohnDoesdoe]

MA--

They know about all 3 loans (same internet account).

The loans documents do not detail if Countrywide can legally apply monies to different loans.

Where can I go to find out the law. I would imagine that I can legally make a payment on a secured debt and the the lender must accept it??

[seniorjudge]

Originally Posted by JohnDoesdoe

MA--

They know about all 3 loans (same internet account).

The loans documents do not detail if Countrywide can legally apply monies to different loans.

Where can I go to find out the law. I would imagine that I can legally make a payment on a secured debt and the the lender must accept it??

Q: I would imagine that I can legally make a payment on a secured debt and the the lender must accept it??

A: That's my guess too. Make sure the loan account number is on the front and on the back of the check.

[HomeGuru]

Originally Posted by JohnDoesdoe

MA--

They know about all 3 loans (same internet account).

The loans documents do not detail if Countrywide can legally apply monies to different loans.

Where can I go to find out the law. I would imagine that I can legally make a payment on a secured debt and the the lender must accept it??

**A: read the fine print in your mortgage and note documents that you signed at closing.

[JohnDoesdoe]

MA--

I have read the fine print and see nothing that suggests that lender can take monies from another loan and apply them as payments. Am I missing something?