Bankruptcy Vacated
My mortgage company has a DIL program (basically give it back to the bank) what is the catch?
We are thinking about Chapter 7 bankruptcy and our mortgage company told us about this DIL (Deed In-Lue of forclosure) program they have where we basically sign the deed back to them and they waive trying to get any shortages from us when they sell. They say this also keeps us from having a foreclosure on our credit report. None of this really matter because of filing backruptcy, but it just seems too good to be true so what is the catch?
I know some mortgage companies are even paying people to vacate houses early that are in foreclosure in order to keep there from being damage done to it. Is this the same type of idea this mortgage company has?
It’s going to depend on what state you live in, but chances are if you are already in bankruptcy, the bank won’t be afforded the right to a deficiency judgement, if allowed by your state’s foreclosure laws, if they foreclose while you are in BK.
With regard to paying peeps money to vacate a home, this is called “Cash For Keys” and can be any amount from a couple hundred bucks to 2% of your loan amount. If the bank offers this to you, first get it in writing, then agree to it & comply.
The repercussion on your credit won’t really make much difference. Ask your BK attorney or accountant if you will still qualify or the Mortgage Debt Forgiveness Act so you don’t have to pay income tax on the amount of cancelled debt.
Honolulu Symphony’s Bankruptcy Shocks Community
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