Ask Experts Questions for FREE Help !
Ask
    FREDRICK SMITH's Avatar
    FREDRICK SMITH Posts: 2, Reputation: 1
    New Member
    		  
    #1

    Jul 11, 2008, 08:58 AM
    Deed and lieu or deed in lieu
    If you are in trouble with your mortgage company, and will not be able to make your payment because your payment has went up by 578.00, you ask the company for help and they suggest short sale or deed and lieu. What does that mean and how do you procees at this point.

    Do you just turn over your keys and walk out?

    The payment has never been late,or missed a payment in over 5years.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #2

    Jul 11, 2008, 09:06 AM
    A short sale is when the bank allows you to sell the property for less than the balance of the mortgage. They then "forgive" the difference. By doing so, the difference becomes a gift to you that will represent taxable income for the next year.

    A deed in lieu is when you turn ownership to the lender. In such a case, they may allow you to walk away without any further liability, or they may sell it themselves and again "forgive" any shortfall.
    Dr D's Avatar
    Dr D Posts: 698, Reputation: 127
    Senior Member
    		  
    #3

    Jul 11, 2008, 12:39 PM
    This is just an addition to Scottgem's fine answer. The "Mortgage Forgiveness Debt Relief Act of 2007", MAY eliminate the tax liability in the case of a mortgage on a primary residence, which was used to purchase or improve the property. A website that I visited mentioned that the borrower must be insolvent at the time of foreclosure to get relief under this act. You should consult with a tax expert to determine its effect on your situation.:)
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Deed in Lieu of Foreclosure [ 1 Answers ]

I have a situation which to the best of my knowledge is quite a head spinner. There is a 1st Trust Deed on a property who has currently filed a Notice of Default. There is also a 2nd Trust Deed which was taken out 12 months ago. At the time of signing the paperwork for the 2nd Trust Deed the...

Is deed in lieu of foreclosure my only way out [ 1 Answers ]

I was going through nasty divorced when asked by friend if I could help out his house Was being foreclosed on.Agent for bank contacted me who I knew I told him I did not Want to do this. He invited me to restaurant where after few drinks I was handed papers To sign.I told him I did not want to...

View more questions Search