Question:
I opted to sign the deed back to the bank instead of letting them foreclose on it. It is any better for my credit or not? Also what if they don't sell it for the amount owed on it, what happens? Do i have to pay the rest or do they just eat it because they have the deed to it?
Answer:
Deed in lieu is better than foreclosure for your credit. Also, you should have negotiated that the lender could not come after you for a deficiency in consideration for deeding the property over to them, too late now, just hope they do not come after you later.
It's spelled "deed in lieu". You still have to pay the rest...you don't honestly expect them to "eat it", do you? Either option deep-sixes your credit. If you can't pay the mortgage, nothing else gets paid either.
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