How do I write a letter of explanation for a foreclosure?
Your letter should start with an introduction of who you are and what kind of loan you are applying for. Lead into your story with something like “We want to explain our foreclosure from six years ago.” Then, launch right into the details that led you to lose your home. This is not the time to be shy or modest.
Is deed in lieu better than short sale?
A deed in lieu of foreclosure is different from a short sale because it transfers the property to the lender instead of selling it to a new buyer. Most lenders find this option less appealing than a short sale because they will need to handle the logistics of the sale instead of the homeowner.
How do you start a letter of explanation?
Begin the letter with the date, a salutation, and an introduction of the incident or issue. Provide a short but detailed description without having to add unnecessary terms and phrases. Provide an explanation of the steps you’ve taken to rectify the error or to complete the missing information.
How do I write a letter to pre foreclosure?
Dear (Defendant), I’d like to take this opportunity to introduce myself. My name is (your name) and my family and I have been looking for a home in your area. We realize that you and your family may be going through a difficult time and there may be a way that we can help you.
Does a deed in lieu of foreclosure wipe out junior liens?
The other well-known disadvantage to accepting a deed in lieu is that, unlike a foreclosure, a deed in lieu does not eliminate any junior liens against the property.
How does deed in lieu affect taxes?
When recourse debt is involved in a deed in lieu of foreclosure, the transaction typically results in cancellation of debt (COD) income. If the debt exceeds the property’s FMV, the excess is treated as COD income taxable as ordinary income unless an exclusion applies (see below).
Do I have to disclose deed in lieu of foreclosu?
In cases of agreements for deeds-in-lieu of foreclosure, lenders and their counsel should have the mortgagor sign the sales disclosure form at the time the deed and related settlement documents are signed. Other steps. Although the process can vary from county to county, generally a deed and a sales disclosure form make their way through three county offices: first the assessor, second the auditor and third the recorder.
What are the consequences of a deed in lieu of?
A deed in lieu of foreclosure is an alternative to the formal foreclosure process. Deed in lieu of foreclosure consequences may include tax liability and a lower credit score, although foreclosure can lead to these results as well. Deeds in lieu are faster and easier than going through foreclosure.
Why do you need a deed in lieu of foreclosure hardship letter?
Sample Hardship Letter: For home owners that are facing foreclosure, a deed in lieu of foreclosure provides an alternative solution for people suffering a hardship. In particular, the deed grants the lender, full rights to the property title to satisfy the conditions of the loan.
Is it better to foreclose or deed in lieu?
In most cases, a deed in lieu of foreclosure is better than foreclosure for the borrower and the lender. The borrower gets out of debt that he cannot afford to pay and avoids foreclosure. Even the borrower’s neighborhood benefits as news of foreclosures, which are public record, lower surrounding home values.