Friday, August 17, 2007

query: died in lieu of foreclosure

Heavens. Given the choice, I think I would have gone for the foreclosure.


Crystal said...

Why would you choose foreclosure instead? What are the pros and cons? How long can a foreclosure remain on your credit report? Also, can a lender make you pay the difference in what you owed in comparison to what it sold for? If so, is there a frame in which they must request you to repay?

Diane Cipa, The Closing Specialists® said...

Sorry, Crystal. It was really a joke because I know the query was really DEED in lieu of foreclosure but it was misspelled as DIED, so.....I'd rather have foreclosure than death, wouldn't you?

But being serious, foreclosure isn't a funny matter and I am happy to answer your questions. Of course, you may want to seek the advise of an attorney.

Avoiding foreclosure may help your credit record and would help keep your name out of the sheriff's sale list. Many people take this option to avoid embarrassment. It's a personal choice.

In either case you may still be liable for amounts the lender doesn't recoup. You must carefully work with the lender so you understand your obligations.

Also, in either case, the lender may report the amount they do not collect to the IRS as a forgiveness of debt. Some people recommend that you make arrangements to continue to pay the lender over time to avoid the IRS problem.

These are all issues you may want to discuss with an attorney because you could end up clear or you could end up with a big IRS lien.

Please be careful and be well.

Truly, the bottom line is that in the face of financial hell, life does still go on and yes, good times always come again and you find the gifts of life elsewhere.