Can anyone give insight into turning deeds back into mortgage company?

Question

Have a single morgage for $170k - market value $125k - considering selling vs. trying to turn deed back into mtg. co (deed-in leiu of forclosure). Will that look bad on credit report? options? ideas?

Answer 1

Question is can you still afford the mortgage? If yes then you are being a fool for turning the deed back in and taking a big hit on your credit. Homes are supposed to be a long term investment and yes in time you will earn back your investment and worth. To walk away or take a lose because you are at this point undervalued but can afford is a bad investment attitude and will forever haunt you well at least for 10 years. Sorry you did not make a quick buck, but you are attempting to make things worse.

Answer 2

Any settlement with a lender (other than a full payoff) will look bad on your credit, but if you are underwater by $45,000, there may well be no choice.  Talk to the lender, your options are:

- Give the lender a deed in lieu of foreclosure.  The lender may prefer this, as it avoids the costs of doing the foreclosure process.

- Short sale.  You keep the property, but put it on the market, and the lender agrees to take the purchase price in settlement.

Answer 3

It is not nearly as bad as a foreclosure.    It also shows that you took action instead of just trying to rip off hte bank for as much as possible, which counts when your report is actually read.