Deed in Lieu of Foreclosure - Mortgage Crisis Not Over

by Mary A. W. in Quincy, Florida

Ask Kate what happens after a recent deed in lieu of foreclosure: The mortgage crisis is definitely not over in many parts of our country. Florida is still suffering. Mary and her husband, out of work and in need of medical attention, have deeded their home back to the bank to avoid mortgage foreclosure. But with no heat in their temporary living quarters, they are desperately looking for the next step.


Mary asks Kate for Direction After Recent Deed-in-Lieu

Deed in Lieu of Foreclosure - Mortgage Crisis Not Over
Hi Kate,

My husband and I just signed the final papers on the deed-in-lieu. I am working but I don't know for how long and my husband is in the same situation.

We both will have surgery soon and our jobs are in jeopardy. The only source of income left will be his social security.

Our living situation is temporary and we have no heat. We need to move soon and we are in dire need of relocation assistance.

What should we do first? Confused and tired.

Kate Answers: Deed in Lieu of Foreclosure - Mortgage Crisis Not Over

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Dear Mary,

I just sat and looked at your letter last night. That's as far as I could get.

The situation is heart-breaking.

But today I am going to see if I can offer you some direction.

HAFA Relocation Assistance

Firstly, are you expecting the $3000 relocation money from the deed in lieu process? Although it normally can take up to a couple of weeks, call the lender and stay on them. Describe your situation and ask them if they have the authority to step up the process.

Because no one likes admitting they don't have authority, asking this question can spur employees into going to bat for you, who otherwise may be more complacent.

While you have them on the phone, confirm that they have a reliable address for you on record.

For anyone reading this who is not familiar with the relocation assistance, Making Home Affordable's foreclosure alternatives, also known as HAFA, provide $3000 to homeowners who, instead of foreclosure, opt for a short sale or deed-in-lieu.
A short sale occurs when a house is sold for less than the mortgaged amount. A deed-in-lieu of foreclosure is a voluntary act of the homeowner deeding back the title of their property to the bank. There is an approval process for both.
Read more at Deed-in-Lieu of Foreclosure - HAFA Assistance.

HUD-approved Housing Counselors

Next, please call the HOPE hotline to speak with one of the HUD-approved housing counselors. The toll-free phone number is 888-995-HOPE (4673).

There is no charge for speaking with them. They provide advice on buying or renting a home, foreclosures, modifications, and credit problems. They are also an excellent source of local help.

Read more about Free Making Home Affordable Housing Counselors.

MyFlorida.com for State Assistance

Additionally, go to the government website for the state of Florida (myflorida.com). Scroll down and click on the public assistance link, then "Apply for Benefits". If it's simpler, call Florida's Customer Call Center at 1-866-762-2237 and ask for help.

I wish I could offer more direction. Hopefully, other readers will leave a comment if they know of other available help.

Best wishes,

Ask Kate


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I am under water on my mortgage
by: Sandy in Oswego, IL

Hi Kate,

I guess the best to put it is that my husband is the primary person on the mortgage. My mother is the co-signer.

We filed a chapter 7 in which included the mortgage. We didn't reaffirm the mortgage. So now he is no longer liable for the mortgage.

However we still live here and we have fallen 2 months behind again. I am wanting to know what is the best program that we would be eligible for at this time. I will not sell or let my mother take the fall for us being behind.

Here is where the mortgage stands: we have an FHA loan at a rate of 3.5%. We owe $250,000.00 but it is only worth $160,000.00

So I want to have the $90,000.00 difference be forgiven and get a new mortgage with the $160,000.00.

Also our taxes have gone down as well and PNC is not changing our mortgage payment. I have seen all of your suggestions and still I have no idea on which I should apply for.

Thanks, Sandy

Hi Sandy, Kate here...

Thanks for the clarification. :)

Here is what I'd suggest. Call your lender to see if you qualify for the FHA Home Affordable Modification Program. This will hopefully make your house payments more affordable.

Mention that you'd appreciate for them to consider a PRA, principal reduction alternative, to contribute even more to your mortgage affordability.

FHA has a National Servicing Center where you can ask questions. Call them at 877-622-8525.

Also talk with them about the property taxes. Ask when your payment will begin to reflect the lower taxes.

One more thing. Has your mother run her credit since the house was listed in the bankruptcy? She might want to know if any negative credit from the BK overflowed onto her history.

Best wishes, Kate

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