DEED IN LIEU OF FORECLOSURE
If your property is currently in foreclosure and you no longer wish to retain it, then you should strongly consider a foreclosure alternative such as a deed-in-lieu.
A deed-in-lieu is a transaction whereby the company that owns the rights to enforce the terms of the mortgage you agreed to in order to purchase or refinance your property takes ownership of the property in exchange for voluntarily dismissing the pending foreclosure lawsuit.
In some instances, the property owner may have multiple liens on the property – most commonly held by mortgage companies, homeowners/condo owners associations, local and Federal governments, utility companies and contractors/mechanics. A lien is placed on the property either with the owner’s permission (such as a mortgage) or as a result of an unpaid debt.
During deed-in-lieu negotiations, it is common for all the subordinate or “junior” lien holders to agree to release their lien in exchange for a financial settlement to be paid by the first position or “senior” lien holder which would then take possession of the property “free and clear” of any other liens.
If a deed-in-lieu of foreclosure is successfully negotiated you would normally have 15-30 days to vacate the property and leave it in broom swept condition. The lien holders typically release you from any future liability in regards to the remaining balance (i.e. the “deficiency”).
A deed-in-lieu of foreclosure should be pursued as a last resort when all other loss mitigation options have been attempted unsuccessfully. In fact, most lenders will not even consider a deed-in-lieu of foreclosure until the property has been marketed for sale for at least 180 days. There are exceptions made on a case by case basis so you are encouraged to consult with a qualified foreclosure attorney in advance of pursuing a deed-in-lieu of foreclosure or any other loss mitigation program.
If you are delinquent on your mortgage payments or already in foreclosure you should contact the Law Offices of Brian M. Rokaw, P.A. to discuss your options in order to avoid a foreclosure sale.
Please contact us today to schedule a no obligation consultation and see if a deed-in-lieu of foreclosure is right for you and your family.