Can a deed-in-lieu not effect homeowner's credit?
Submitted by deborahleone on Fri, 05/30/2008 - 12:22pm.
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Comments:
Depending on the lender, this can be negotiated. If the lender agrees to accept it, and report it, as "paid in full" then it will likely not affect your credit.
More likely it will be reported as "settled for less than the full amount", which I'd expect to be treated the same as a short-sale, which is better than a foreclosure or a bankruptcy.
It has been a while since I looked into this in-depth, so I may be a bit out of date. I'd advise checking with a credit expert for the latest.
Good advice Sean....to get more up to date info.
It's true that a lender reporting PAID IN FULL is the best way to go on a Short Sale negotiation. Get it in writing from the lender that they will report this way!
Many times they report the PAID IN FULL and 6 mths later they will go with PAID FOR LESS THAN FULL AMOUNT.
This reporting is as bad as foreclosure, short sale, or deed in lieu.
Read MyFico.com on this. The site is operated by Fair Isaac, the folks who invented credit scores.
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