I don’t know if it was naivete or wishful thinking. Yesterday I had a call from a consumer who was looking for homes for her mother. She had found something she thought was suitable and she wanted to see it that night. I had never met her before, so part of my job is to pre-qualify a buyer before I inconvenience a seller with an unnecessary showing. After all, who wants to schlep the family out during dinner time for someone who can’t really buy the house, right?
So I asked the woman, let’s call her “Joy”, if her mother had spoken to a lender.
Joy said, “No, but I know her credit is great. I am not at all worried about her qualifying for a loan.
Me: “Is her current home on the market?”
Joy: “Yes, but she is doing a program with the bank where she gives it back to them after 3 months.”
Me: “That is foreclosure.”
Joy: “No, it is a program called Deed in Lieu, where the bank just takes the house back.”
Me: “It is called Deed in Lieu of foreclosure.”
Joy: “Oh. I don’t think my mother understood that.”
Bottom line: Banks don’t want houses back. They don’t have special programs that make losing your home a non-event. A home is not a returnable purchase. There are generally repercussions, and walking out with a perfectly unblemished credit history is not typically one of them.
[tags]foreclosure, deed in lieu, deed in lieu of foreclosure[/tags]
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