Deed in lieu of Foreclosure

[nel1978]

What is the name of your state? Michigan
We have a mortgage on house #1, which is $80,000 less than the value of the property. We can no longer afford the mortgage payment, but do not wish to foreclose because it will tarnish our credit. We would like to explore the option of "Deed in lieu of Foreclosure".
1. Is it likely that the bank will agree to Deed in Lieu of Foreclosure?
2. Are there fees or penalties associated with this procedure?
3. We have a second house that is mortgage free. Will the bank put a lien on house #2 or will they reject the Deed in Lieu of Foreclosure due to the ownership of house #2?
Thank you.

[bdancer]

Is there some reason why you aren't just selling house #1? Seems that with $80K of equity, you should be able to discount the price to cover mortgage payoff, selling expenses, and put something in your pocket.

[HomeGuru]

Originally Posted by nel1978

What is the name of your state? Michigan
We have a mortgage on house #1, which is $80,000 less than the value of the property. We can no longer afford the mortgage payment, but do not wish to foreclose because it will tarnish our credit. We would like to explore the option of "Deed in lieu of Foreclosure".
1. Is it likely that the bank will agree to Deed in Lieu of Foreclosure?


**A: no since you have assets to make things right.

**********
2. Are there fees or penalties associated with this procedure?

**A: yes...

**********
3. We have a second house that is mortgage free. Will the bank put a lien on house #2 or will they reject the Deed in Lieu of Foreclosure due to the ownership of house #2?
Thank you.

**A: most likely a rejection. Put yourself in the banks shoes.

[pojo2]

Who told you a Deed in lieu of will not get you a tarnish on the credit report anyway?

And as bdancer ask why are you not selling this property instead of wanting to GIVE away the 80K of equity?

Something don't smell right here.