OT - Advice needed...the next chapter of NIk's mortgage drama...

Ok, so I had my mind all made up to let the damn house go into foreclosure. I was gonna stop paying it and just save up to move.

But then the doubt crept in. So I called my mortgage company and laid it all out on the table. All my bills, all my concerns, the fact that I don't want this damn house and will never, ever be able to afford the payment on it.

They offered me some options. I already knew about them, but don't know ENOUGH about them to know which is best for me. I'm hoping you guys might provide some insight.

They said either they would do a deed in lieu of foreclosure or I could apply to do a short sale.

Either way, they are willing to forgive the difference between the principal balance and the amount the house sells for (I do understand there are tax implications to this). In both cases they'd offer me $3,000 relocation assistance. The only difference being with the short sale I do most of the work and have more time vs. the deed in lieu where I get to just walk away...but I have to do so very, very soon.

I'm not good with fast transition but I am pushing myself forward on this one. Either way I'd be moving sooner than I naturally would. I asked them to go ahead and order the appraisal on the house but that I hadn't decided yet which option I'll take. I'm trying to make a decision by mid-next week.

I'm thinking I should call Legal Aid or someone next week to see if I can get a legal consult of some sort (no idea right this second what I need to ask but it seems like I should do that), but would REALLY value input from you guys.

Just so you know...neither of these options make me sad. I'm feeling a combination of fear of the unknown and immense relief that there FINALLY seems to be a way forward. I just need to make sure my next move is a smart move.

What do you all think? I respect your voices a lot.

I know nothing about this but did a quick search and this page seems to have a good explaination.

http://www.bills.com/a-deed-in-lieu-of-foreclosure-vs-a-shor t-sale/

It looks like both are better than a forclosure.  I'd do whichever is easier for me, not what is cheapest.  You want to get out so do it easy.

Good luck

Pup

If there is no significant financial difference eitehr way, my personal opinion is that you might be better off to just do the deed transfer and be done with the whole mess (and move on quickly rather than dragging it out).  Sometimes there can be mental health implications of taking an option that involves "mre time" (nothing severe, mind you, just additional stress for both you and the girls,a chance for the fear to increase, etc.).

I think contacting Legal Aid is a great idea, too.

Lora

Yeah, my first inclination was that the deed in lieu was a good option for me.

Mentally I am DONE with this house. I'm ready to BE done with it. They have to accept you for that though. So it all comes down to the appraisal. I think they are trying to determine exactly how much money they'd lose. I'm not sure. I haven' had this house appraised since the last refi which was before the mortgage crisis and I'm pretty sure the loan officers were sheisty. So...

I'm going to call Legal Aid on Monday to see if I can find a sliding fee scale lawyer (I know I don't qualify for free services) and just go over all my options, with the house, my finances and everything.

This is scary as hell but my gut says it's the right thing to do which is comforting.

Whatever you decide...get the bank to put everything in writing.  Such as they will forgive you the difference and also that they will give you $300 relocation assistance.

I agree with the above post. The mortgage company can come after you for the difference between what the house sells for and what you owe, just get every thing in writing

I can tell you from experience that a deed in lieu of foreclosure is a great option. Me and my husband did it over 10 years ago on our first house and it just shows that our house was paid in full on our credit reports. Hope this helps.

My husband works in foreclosure for JP Morgan and he said out of the two options the Deed in Lieu transfer is your best bet.  Make sure you get everything in writing before you make any decisions.  With the Deed in Lieu you don't have as much time, but you can walk away without doing a ton of work.  He said short sales are a lot of work and certain criteria have to be met in order to do one.  Apparently not everyone qualifies for one.  I remember you saying that there were homes in your area that were doing short sales that still had not sold.  That would be something to take into consideration as well.  If it were me I would do the deed in lieu of foreclosure.  

I would call Legal Aid and see if they can offer you some assistance.  Surely they have someone that deals with Real Estate laws.  Good luck with whatever you decide. 

 Nik do you live close to a university with a law school?  If so they have student lawyers that need practice and they have a professor of law guiding them and that might be your best way to go if you can't afford a lawyer, no certain income required to do this.  I used them when I lived in TN and won my case against the hospital I worked for at the time.  I was the only one that sued that won, also, others had hired big time lawyers. 

 Nik, you may have already done the research but here's a list of legal resources in B'more: http://www.probonomd.org/current.html

Also, if you'd ever need some free, or short-term, counseling - just to talk about all that you have going on, here's another pro-bono agency (I volunteer with them but am in Montgomery Co and only take spanish-speaking clients. They do sliding scale and free for low income)  http://www.probonocounseling.org/