Hi, I'd like to help you with your bankruptcy questions this afternoon.
You have nothing to lose by trying to get the bank to agree to accept a deed in lieu of foreclosure.
This will adversely affect your credit score, but it won't be as harmful as a foreclosure.
A deed in lieu is similar to "cash for keys" or mailing your keys into the bank. However, make sure you get a release from the bank so they cannot sue you for a deficiency judgment after they sell the property.
You could do nothing and let the foreclosure go through, but you would be risking a potential deficiency judgment if the sale proceeds do not cover the existing principal balance amount.
Filing bankruptcy NOW would only be a good option if you wanted to keep the house (and can afford the payments).
However, you might want to consider bankruptcy at a later date if the bank does, in fact, pursue a deficiency judgment against you after the foreclosure.
Do you have any other questions for me?
Yes--is the Deed in Lieu a long process? I just spent a horrible year doing paperwork for the failed foreclosure. Do you know what percentage of requests for release from the bank (Wells Fargo) go through? I'm definitely worried about tax problems down the road.
It looks like it would take roughly 3-5 months if you're eventually approved, based on what I'm reading online.
Do you have a second mortgage on the home? This would potentially make the deed in lieu process more difficult.
I don't know the exact statistics, but Wells Fargo is one of the "better" lenders as far as responsiveness (relatively speaking, of course).
I paid off the second mortgage with my 401k in an effort to help the foreclosure go through. There is an outstanding water bill for several thousand dollars which we are unable to pay. No other liens, etc.
I can't guarantee anything, but you seem like a good candidate for a deed in lieu. The major obstacle to a deed in lieu is usually a second mortgage held by a different lender, so it's good that you don't have that issue.
Here's the link for the Wells Fargo Deed in Lieu option: https://www.wellsfargo.com/homeassist/deed
If you're concerned about spending a lot of time on this, you may want to hire a local attorney to handle the process for you.
Last question--next step--talk to Wells Fargo and tell them what I'm thinking re: Deed in Lieu or don't say anything--see where they plan to take it next?
You might want to ask about any other options you might have and see what they say. It can't hurt.
Okay. Thanks for your help.
Thank you, XXXXX XXXXX luck.
Have a good day and I'll sign off now.
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