[WSBARP] Deed in Lieu Q

[marc holmeslawgroup.com]

Yes, it is viewed negatively and will impact the credit score if reported to credit bureaus.  That’s pretty much a given with traditional lending.  If your client used seller financing from a private individual then the odds are probably pretty good it will not be reported.

As you mentioned, the 1003 Uniform Loan Application used by most lenders requires the borrower to declare whether they have had a foreclosure or deed in lieu thereof in the last 7 years.  I’m not certain what the current Fannie/Freddie guideline is for being eligible for another loan but I think it is less than the full seven years.  A good loan officer will know that off the top of their head.

https://www.fanniemae.com/content/guide_form/1003rev.pdf


Marc Holmes
Holmes Law Group PLLC
2303 W. Commodore Way, # 306
Seattle WA 98199
HolmesLawGroup.com<http://holmeslawgroup.com/>
marc at holmeslawgroup.com<mailto:marc at holmeslawgroup.com>
Ofc: 206-357-4224
Cell: 206-849-0853

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]<http://sullivanlawfirm.org/>
701 Fifth Avenue, Suite 4600
Seattle, Washington 98104
P: (206) 903-0504 | F: (206) 260-2060
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