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princess37
Posts: 2
Registered: ‎12-16-2007
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Foreclosure,BK,DC,Deed in lieu or... what else ?

[ Edited ]
So now,after reading and reading for 2 hours, here is my question:
 
If I sign a Deed to the lender to avoid the foreclosure, how does this one appear in my credit report ?
 
My credit score went from 765 last year down to 250 this year,I didn't even know it could go lower than 350 !
 
Anyways, all efforts are being done now to avoid BK and pay the cccard debt and return the "investment" properties to their respective lenders, and get "back on my feet".
 
But now I'm really thinking if this BK thing would be better than going through all the hassle of going to court,getting extensions,trying to short sale the properties,deed them back if no realistic buyer shows up, settle with the credit card companies,etc,etc.
 
I'm sure someone on this site could give me their point of wiew,since all of you would be looking from a different perspective than mine !
 
P37


Message Edited by princess37 on 12-16-2007 03:48 PM
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HelpMe01
Posts: 54
Registered: ‎09-27-2007
0

Re: Foreclosure,BK,DC,Deed in lieu or... what else ?

[ Edited ]
I have a friend who is going through kind of the same thing and is definitely better to try to do a short sale on your property rather than going to foreclosure.  You won't get any money out of the sale, but I guess that would be better than having foreclosure on your credit report.  Are you able to make payments, but maybe not as much as your actual payment is?  You might want to try to call them and maybe see if they can work out your payments as far as lowering your payment amount, interest rate, etc.  I have heard of this working and it might be something you want to look into.  I'm sure your lender would rather take a lower payment from you than lose money by foreclosure, court fees and attorneys fees.  I know I didn't really answer your question, but just thought I'd give a little bit of advice to help you along! 
 
If you were to go through BK then that would damper your credit choices for at least a year or two, maybe more.  And even after that a manual review showing BK might prove difficult with some lenders, depending on what credit transactions you may be trying to do.
 
Good luck with everything and hope everything works out for you.  I know it may seem difficult but with all the advice you'll get on this forum I'm sure something will work out!
 


Message Edited by HelpMe01 on 12-17-2007 12:15 PM
Established Contributor
jackg
Posts: 558
Registered: ‎04-26-2007
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Re: Foreclosure,BK,DC,Deed in lieu or... what else ?

princess37,
 
If I had a "do over" I would everything possible to avoid the 3 following items from showing up on my credit report:
1. Bankruptcy
2. Foreclosure
3. Tax Lien
 
These 3 have a seriously negative impact to your FICO scores and when potential lenders see any of these they "close the door". I have all of them on my CR and I'm paying dearly for "TEN YEARS".
FICO scores on 07/31/14:
EX=730
EQ=716
TU=740
Moderator Emeritus
fused
Posts: 16,374
Registered: ‎03-12-2007
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Re: Foreclosure,BK,DC,Deed in lieu or... what else ?

I can't offer up any advice as to what you should do in your current situation but in terms of FICO scoring all of these would report under public records. In terms of FICO scoring, a short sale would be treated the same as a foreclosure or a deed in lieu of foreclosure. If any balance and/or past due amounts are also being reported, this will lower scores even more. In fact it can get even worse if the amount owed is high, the higher the balances the bigger the hit will be to your scores. How much is hard to say but this type of serious derog can do as much damage as a collection, CO, judgment or any other public record including a BK.
 
Credit Profile -
FICO 08 Scores (09-16-2014): EQ 824, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1 (Amex 07-15-2014)

New Contributor
HelpMe01
Posts: 54
Registered: ‎09-27-2007
0

Re: Foreclosure,BK,DC,Deed in lieu or... what else ?

fused, if someone were to do a short sale would that be notated in the comments section or would it just show the loan paid with having a balance? 
Established Contributor
granny031350
Posts: 951
Registered: ‎12-04-2007
0

Re: Foreclosure,BK,DC,Deed in lieu or... what else ?

This is just my opinion, but I did a short sale on my property in 2001/2002, supposedly in lieu of foreclosure.  Whatever you do, get it in writing!!  I was so far gone mentally at the time due to everything going on in my life at the time, I didn't even think about getting it in writing.  My mortgage lender (a top one in the industry) bought out my real lender just months prior to my demise financially.  This top notch lender called me and said, sell your home for less and on your credit report, it will be noted as paid with no foreclosure and we will give you 1000 for moving expenses.  What a fool I was.  Not only was it listed as foreclosure but the deficiency balance owed was listed as well.  The 2nd mortgage sued the first and the 1st ending up losing money to pay off the 2nd and finish up the sale of my home to this unsuspecting couple.  (The realtors both knew the situation however).  So I ended up discharging the deficiency balance in my BK.  It won't matter, actually I think BK is quicker to recover from than foreclosure.  File, then give the house back!
New Contributor
HelpMe01
Posts: 54
Registered: ‎09-27-2007
0

Re: Foreclosure,BK,DC,Deed in lieu or... what else ?

Granny, if you really felt like being a pain in the ... about the deficiency balance for your short sale you can always go back legally to the title company and sue them for not getting it in writing (which by law they have to do).  They'd have insurance to cover that claim but it could turn into some extra money for you.  My insurance underwriter dished out a lot of money recently for a case similar to yours and she is livid.  It worked out for the person on the other end though! :smileyhappy:
Established Contributor
granny031350
Posts: 951
Registered: ‎12-04-2007
0

Re: Foreclosure,BK,DC,Deed in lieu or... what else ?

really?  wow I never knew that.  My realtor handled  the discussions with the mortgage company after my initial conversation and "ok" to short sale and take the 1000.00  They had to approve the offer submitted etc.  I will have to look into that.  ty
Established Contributor
granny031350
Posts: 951
Registered: ‎12-04-2007
0

Re: Foreclosure,BK,DC,Deed in lieu or... what else ?

In addition, I filed a chapter 13 in 05 to clean up all the wake of divorce etc and this same mortgage company filed a claim for over 75000.00 that they claimed I still owed on my house discharged in my chapter 7 in 01.  Of course I objected and they withdrew it but they filed a "secured" claim and my trustee actually thought I owed them this money.  It was a mess that took a couple of months to rectify.
Moderator Emeritus
fused
Posts: 16,374
Registered: ‎03-12-2007
0

Re: Foreclosure,BK,DC,Deed in lieu or... what else ?

[ Edited ]


HelpMe01 wrote:
fused, if someone were to do a short sale would that be notated in the comments section or would it just show the loan paid with having a balance? 


Let me calrify my earlier post. In most instances a foreclosure or a deed in lieu of a foreclosure will report as a derog trade line and not a public record on credit reports. In this case, any balances or past due amounts on these derog trade lines can lower scores even more. If they report as public records (not common), balances owed and status (paid or unpaid) have no impact on scores.



Message Edited by fused on 12-18-2007 12:20 PM
Credit Profile -
FICO 08 Scores (09-16-2014): EQ 824, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 26+ years ~ AAoA: 12 years ~ Util: 1% ~ Inqs: EX 1 (Amex 07-15-2014)


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