Fico Score effect of a deed in Lieu or a Forclosure - Propert Tax Liens

[Scottypw]

1) Does in anyone know which of these two has the worst effect on fico scores and how long each of these will stay on a credit report.

2) How long does it take for a property tax lien to show up on your credit report approximately once you miss making an installment on the tax filing deadline.

Thanks

Scott

Message Edited by Scottypw on 09-30-2007 12:43 PM

[Anonymous]

you have to be wayyyyy behind for them to start dunning you like that. hope that's not the case for you. if you just missed one bill, you should be ok.

[fused]

1.) Both are equally bad if there are no balances and past due amounts. If a balance or past due also reports with one of these, it will further lower your scores. The higher the balance, the further your scores will drop.

2.) Not sure on this one. Maybe someone else can comment. 

[Anonymous]

Complicated issues to be sure scotty. I've never heard of a "Deed in Lieu or Forclosure". It almost sounds like a Quit Claim Deed to me. Where you 'deed' the real property to someone in lieu of forclosure. Sounds desperate to me. I'd seek the advice of an attorney if I were you. My real estate brokerage experience goes back to far for me to remember the nuiances. sorry. Regarding your 2nd question: it takes as long as it takes the CRA to search the county records in which you reside. Any payment agreement you reach with the entity who placed the tax lien on your real property, falls beyond the purvue of the tax lien instrument on file at the courthouse. BUT, the CRA's DO receive tax lien filings, and that remains until on your CR until it drops off in 7 years after the filing, IF AND ONLY IF the entity DOES NOT renew the tax lien. They can do renew it indefinitely, I believe, until the tax lien is satisfied. But then again, I am NOT an attorney, and just offering an opinion. Please seek the advice of an attorney

[Scottypw]

Fyi - a deed in lieu of foreclosure is when you sign the property over(quit claim) to the 1st mortagage holder instead allowing the property to be foreclosed on by the same. It saves them time and money then if an individual just sat on the property not paying any interest or taxes waiting for the foreclosure process to run it's course.

[Anonymous]

The explanation below is correct.  A deed in lieu of forclosure is bad but not as bad as a foreclosure.  If you are considering this, make sure that you get your mortgage holder to agree that they won't come after you for any balances especially if your property is worth less than the mortgage amount of if they sell the house for less than the mortgage.  you do this by having them add the terms 'without recourse' to any agreement signed by you.  This is very important.

Also, any amounts owed by you to which the mortgage lender has 'forgave' you for is still taxable to you as income and they can report it to the IRS same as the balance which is left over from a credit card settlement agreement.  Thankfully, Congress just passed a law that gaves people a tax break specifically dealing with mortgages due to the sub-prime melt down.

I would encourage you to talk to your lender now, they have programs that may be able to help you if you wish to stay in yor home or you can consider a short sale.