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Shoud We Sign Our Deed Over to the Bank? – Renee

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mortgage modification,we waited 3 months for this program to come to term.when we recieved it they added 20,000 and 16 years to our life time debt,mind you we’re in our mid 50,s.we chose not to our other option would be .forclose or sign the deed we decided to sign it over.whats your take on this??they say we can refi a mortgage in 2 years verses 7 years ..

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  • Sorry this has happened to you..My daughter and her husband did the modification thing also and ended up loosing there house. They did the keys for cash and was given $1500. The modification I have found is not for everyone. I have a friend that did the same thing with the same company as my daughter and she came out great..Good luck on your decisions..

  • My parents are 70 and 75. They lived in a gorgeous house for 12 years, and lost it due to a company bankruptcy just last year.   They are both on social security now, and doing odd jobs to make up what they need.  They attempted to keep up with the mortgage and taxes for 6 months after the bankruptcy, but they are underwater on the house value, and the bank refused to do a new mortgage.  6 months ago they were told the bank is beginning foreclosure, but have yet to see any paperwork, or anything else (sheriffs, etc.) they have been living in the house, in fact renting 2 rooms (its a big house) and making money.  They don’t pay anything except for cable, and electricity and food. Instead they decided to save all their money each month and already have almost $30K put in the bank. They were told after the foreclosure they would be able to try for a mortgage after 2 years, but they know it will be more like 3 or 4.  They spoke with a local apartment complex and were told they could rent with a poor credit report if they explain and are willing to put down 3 months deposit instead of 1.  Given how much they save each month by not paying their mortgage, they can easily put down up to $10K when they have to move out. BTW, they live in New Jersey – foreclosures are taking in excess of 2 years right now. They have been rent- free for almost 9 months now. They have spoken to their attorney and he said, “hold on as long as you can rent-free, just be sure to pay the insurance b/c you can still be responsible for damages and floods to the property”.  So that’s $1200 a year. They anticipate they will have over $80K put away by the time the bank comes for the house.  The crazy thing is they never missed  a payment, and even tried to pay down the principle with additional payments when times were good.  So no good deed goes unpunished.

    Consider the options before you worry too much about your credit report.  A bankruptcy does go away. Also my parents kept 5 cards they had paid doen and use those for lots of things like clothes, gas, etc. allowng them to float moeny and save more strategically.  Just a thought…

  • Sorry for your problem. To answer your question, yes, it does make some difference if you sign over the debt rather than wait for foreclosure. Of course it may also cost you a few months rent if you move earlier than you would have with foreclosure. And some servicers are offering cash to tenants who go through foreclosure to avoid eviction and the trashing that often follows. I have seen $3,000 pay offs and heard of larger ones so there may be a cash benefit to foreclosure.

    Lenders, including government affiliated agencies like FHA, do have a decreased wait time to qualify for a new mortgage for those who did not go into a full foreclosure but I have never seen anyone qualify for any new mortgage in two years. Remember that there are other factors including having other lines of credit and qualifying by income. Five years may be a more reasonable expectation and you will have a tarnished credit report so you might not get the rental you want in the mean time and you may not get the lowest interest rate when you buy again.

    You are saving your servicer some time and money by signing over the deed so if you want to be nice, that is also a factor. And aside from the mortgage issue, your credit report will indicate a voluntary surrender rather than a repossession. That doesn’t make a huge difference, but it is something. 

    Good Luck!

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