Deed in lieu of foreclosure buy another house

Can you buy another house if you do a deed in lieu of foreclosure?

Let's look at the problem. A deed in iieu of foreclosure looks a lot like a foreclosure. Really no difference. Unless you can get the mortgage company to report it differently to the credit bureau.

If you do a deed in lieu of foreclosure, you grant deed the property to the lender and they stop foreclosure.

You can negotiate how the lender reports the deed in lieu to the credit bureau. The worst is a foreclosure. What you want is unrated, or R0. That is the best. Second best is paid-settlement. Still shows the account as paid. This will not ding your credit too bad. But unrated is best.

You can buy another house today without qualifying for a new loan. So you can be a homeowner even if you've done a deed in lieu or had a foreclosure. It isn't too hard to find a house today with a motivated seller who will let you buy their house subject to their existing loan. Then you don't have to get a new loan. Your name isn't on the loan but that doesn't matter. You are the owner of the house. You get the tax deduction and advantages of home ownership.

A deed in lieu and buying a new house — they are possibilities for you.

And meanwhile, I recommend you get on my quality list so you get instant access to the famed 25 page special report "Keep Your Home" that gives you insider information on how to stop foreclosure, lower you mortgage payments without getting a new loan, slash your credit card debts and avoid bankruptcy. Your info is kept in strict confidence, never shared, and you can unsubscribe any time with just one click.

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8 Comments on Deed in lieu of foreclosure buy another house

[…] deed in lieu of foreclosure or short sale? I get asked a lot about deed in lieu of foreclosure. I’m going to write about deed in lieu here. I also write about it at MortgageReliefFormula.com […]

ivory @ 1:45 pm:

Great site with tons of helpful free information. Thank YOU! Knowledge is power.

JAY @ 5:14 pm:

Im in the process of a deed in lieu right now. I already turn in the paper work back to my lenders lawyers. Im currently in the US Army and since I have gone back in I have been unable to pay my mortgage with my salary. I tired a short sale and that fell through after 2 years on the market. Now I decided t do a deed in lieu and get rid of this headache completely.

What I am worried is what this will do to my credit. I have tired calling and emailing the contact person I have with my lender and she doesnt answer the phone nor email me back about how this will read on my credit report. I have asked in emails that I want to know if I can have the credit report say settled, and still no response.

Im about to discharge from the Army and I have a couple job opportunities and they require me to have a Top Secrete Security Clearence. If this destroys my credit report I wont be able to accept the job. If I do expect the job I wont be able to get a clearence and then I would get fired. Im afraid with the economy that I wont be able to find a better job that I am about to be offerd. Any advice on what I can do to make sure my credit doesnt get slammed to bad?

Thank you.

chris @ 5:45 pm:

I did a deed in lieu back in 07 in colorado but the mortgage company finalized it in may 2009 I want to buy a house in texas but I'm being told that new laws consider it a foreclosure and i have to wait 3 years from may 09 for any loan fha or conventional is this true?

tammy brown @ 2:43 pm:

I am no expert. However, I have seen at least one instance where the federal government has purchased a house from a federal government employee (and sold it to another employee) in order to relocate that person to another assignment in a different city and state. I do not know how that works for the army, but it could be worth taking a look into. Maybe there are opportunites there that have been overlooked.

Michelle Lofton @ 1:38 pm:

First I tried to short sell my home for several months and that fall through. So I decided to give the home back to the mortgage company by during Deed in Lieu. That was finalized back in January 2011. What I notices was the mortgage PAID off the loan value, but send me a statement with a past due balance between $25,000-$29,000 that I owed. But the mortgage stated don't worry about that balance because the home is out of my name. Plus I have not check my credit report since to see what status the mortgage co. reported. Will definitely do that ASAP. Also I need to contact the mortgage co. to see what they reported. Hopefully, it shows as PAID-Settlement or unrated or R0 and not foreclosure. Also I need more advise about this matter. Please call me at 404-805-6329.

KCM @ 11:33 am:

Hello….I am in year 3 of negotiating a DIL with Carrington Mtg, previously was New Century. Denied loan modification several times in 2008 and 2009, lost paperwork, terminated account reps…many reasons I sent the same docs in over and over, Then Carrington sends me this "good news" letter, we modified your loan, ( keep in mind my income docs were denied for a modification already) so now my credit shows my mortgage current all the sudden, add the past due (like 25k) onto the balance due, fixes my payment from an ARM but the payment is about 72 less than I was struggling with….the wise cracker at Carrington says "we can put you back into the other ARM if this is not good?!" really….so I get 3 short sale offers (foreclosure has been in suspense due to home for sale), Carrington denies all 3….highest being 189k, my balance was 320k, they offer me a DIL in March 2010, I sign it by August 2010 after having an attorney advise me, I send it in…it takes until May31 2011 to be finished and recorded. yes, nearly a year later….I moved out in March 2010 for fear of being kicked out…I could have been there all this time….so now I have been back and forth with the 3 credit bureaus, sending the deed, the copies of correspondance from Carrington and attorneys involved…because on credit it shows a huge balance due still, past due amounts still and as a foreclosure…..lovely. It has been the worst experience in life thus far, and I am still fighting for my credit to report correctly….never was served Lis Pendens, nor was there ever any document that said foreclosure about my property….stating foreclosure anywhere on my credit is false information….I have asked for it to be removed accordingly. And due to Florida being a recourse state, I am in limbo for years as to if they will attempt to collect a deficiency….and at that point I will pull out all offers higher than the home is listed today, that they denied and could have had….becaseu they wanted more. well I owed 320k, real value was about 165k, had offers as high as 189k, now they have my home listed at 154,900 with a pending status in MLS…..stay tuned.

DG @ 5:10 pm:

If you do a subject to and the bank finds out can't they make you qualify for the loan or call the note due immediately when they find out you've assumed the mortgage?