[WSBARP] Deed in Lieu Q

[Paul Neumiller]

Without verification, I have been advised multiple times that a deed-in-lieu is a negative hit on a debtor’s credit rating similar to a bankruptcy filing except it stays on the debtor’s credit report for one year less than a bankruptcy.  I treat a deed-in-lieu as a negative hit to the debtor’s credit rating as a legitimate concern to a debtor.


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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Patrick J. Sullivan
Sent: Thursday, March 15, 2018 10:44 AM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] Deed in Lieu Q

Hi everyone:

I have a builder client dealing with a proposed deed in lieu.  I am concerned about the impact of accepting a deed in lieu on the client's ability to obtain credit in the future.  I vaguely recall that lenders typically ask potential borrowers whether they or any entity controlled by them has been involved in a deed in lieu transaction.  Obviously, this would be viewed disfavorably by future lenders.  Is this a legitimate concern or much ado about nothing?

Thanks.

Regards,
Patrick J. Sullivan
[The Sullivan Law Firm]<https://nam04.safelinks.protection.outlook.com/?url=http%3A%2F%2Fsullivanlawfirm.org%2F&data=02%7C01%7C%7C8a9fcdc6f41c4a856b6c08d58a9d231f%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636567329857160780&sdata=46X%2B9l6p0syCaddbI1Ex3j2aNHX0GEbo5EHS742GZpg%3D&reserved=0>
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