Question/Situation:
We started a new construction, but contractor used all money without finishing. We don’t have funds to finish project. While we have been trying to sell the project, but as of now there are no takers. And on top of that we are deliquent over 1 year.

Answer:
A deed in lieu will have an almost similar effect on your credit as a foreclosure would do. It will drop your credit by almost 250 points. However, the deficient amount arising out of the sale of the house is likely to be forgiven by the lender in a deed in lieu. Thus, there are no chances of the lender suing you for the deficient amount and obtaining a judgment against you. You should talk with the loss mitigation department of the mortgage company regarding this. They should be able to help you with the deed in lieu.

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