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The borrower’s Deed in Lieu request and the lender’s Notice of Foreclosure crossed in the mail – what happens?
The borrower sent an application package for Deed in Lieu of Foreclosure at the same time that the lender filed a suit for foreclosure. Both were done before the other was received by either.
Does the liklihood of the lender considering or accepting the DIL change now that a foreclosure suit has been filed with the court?
The borrower has a complaint against the original mortgage broker pending with the state licensing department (Florida DBPR) for issues of fraud and deception. Could this have any affect on the foreclosure proceess?
What other options would you suggest to the borrower when the mortgages equal $330K but the value of the property has fallen to $260K? And short sale won’t work – the property has been listed at market value for 5 months with no actual viewings and only 3 no-shows.
Clarification: Preliminary response from state investigator indicates that the complaint against the broker is valid and that the broker engaged in unethical and/or illegal activity in conducting the transaction.
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4 Responses to The borrower’s Deed in Lieu request and the lender’s Notice of Foreclosure crossed in the mail – what happens?
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If the suit is filed that would probably take presidence.
I doubt they would suspend the action in favor of a DIL unless the terms of the outstanding mortgage would be very favorable to them. The fact there is an action against the broker probably won’t affect the foreclosure action until well after the foreclosure is completed.
The upside down equity tells me they won’t accept a deed in lieu; they are going to want to hit someone with the deficency balance.
If you filed a complaint against the broker or the lender nobody is going to work with you towards any amicable resolution to your plight short of full blown foreclosure. You bit off the hand that could help you.
“And short sale won’t work – the property has been listed at market value for 5 months” — if the property were truly listed at market value, it would be sold by now. Apparently your perception of market value is wrong. You can try lowering the price, but as I said, a lender isn’t going to give you a short sale because of your short fuse.
It seems everyone wants to jump on the bandwagon of pointing the fingers at the mortgage brokers and lenders instead of taking responsibility for their own actions. TYou were given disclosures about the loan program, you had the opportunity to read the loan documents when you signed then, and you agreed to their terms. If you did a stated income loan, you committed federal loan fraud when you claimed a higher income than you made and got into a loan you couldn’t afford. Would you be filing complaints against people if the property had gone up to $400k and you made a boatload of money off the money you borrowed? I think not.
Moment of truth coming up–the time for you to take responsibility for yourself. Get a second job and avoid the foreclosure. Or point your finger at everyone but yourself and lose your property.
There are some ideas on my blog. I will recap a few here.
A short sale can work if the price to the investor is low enough. The lender will need to decide if they want to go that low. A real offer sometimes helps them to make a decision.
You might have a claim against the broker but that will not remove all responsibility from the you as the borrower. Maybe you get some cash but you will still have credit issues for some time.
Get in touch with the lender to see if they will take the deed. Are there any junior liens that will prevent them from taking the deed back? Are you working with a lawyer so that you can get clear advice as to what can work legally?
There is obviously so much more to learn about this. I think you made some o.k points in Features also. Keep working, excellent job! clean foreclosure