What does it penny-pinching when someone voluntarily forfeits their mortgage?
What does it mean when someone voluntarily forfeits their mortgage? I need to know how this happen? What the benefits are? What are the disadvanatges? The person was going into foreclosure so is this a better way out? If so why?
Answers:
When you forfeit your mortgage it is called a Deed-in-lieu of Foreclosure.
Here is some more information on that.
http://www.afscanhelp.com/deed.cfm
That isn't a phrase that's used around here, but if it means the homeowner is walking away, that may tight-fisted with or without the lender's agreement. If the lender agrees, this is usually call "tender of a deed in lieu of foreclosure." While it may rescue money, as the lender is spared time and expense of going through a full foreclosure, and possibly saves the borrower from any deficiency should the lender ultimately lose money on the mart, it will show up on the borrower's credit report.
A better option is if there is a buyer, trying to tempt the lender to accept a "short sale" where they adopt the net proceeds as payment contained by full on the loan. Usually lenders that will do this will not go below a certain percentage of the loan match. Lenders often prefer this to any option that make them the owner of the property, as it saves them taxes, insurance, and selling costs.
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Answers:
When you forfeit your mortgage it is called a Deed-in-lieu of Foreclosure.
Here is some more information on that.
http://www.afscanhelp.com/deed.cfm
That isn't a phrase that's used around here, but if it means the homeowner is walking away, that may tight-fisted with or without the lender's agreement. If the lender agrees, this is usually call "tender of a deed in lieu of foreclosure." While it may rescue money, as the lender is spared time and expense of going through a full foreclosure, and possibly saves the borrower from any deficiency should the lender ultimately lose money on the mart, it will show up on the borrower's credit report.
A better option is if there is a buyer, trying to tempt the lender to accept a "short sale" where they adopt the net proceeds as payment contained by full on the loan. Usually lenders that will do this will not go below a certain percentage of the loan match. Lenders often prefer this to any option that make them the owner of the property, as it saves them taxes, insurance, and selling costs.
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