What is a Deed in Lieu of Foreclosure?
You have defaulted on your mortgage loan. Together with your lender, you can reach an agreement through a new contract.
This contract is called a Deed in Lieu of Foreclosure, and is created to settle an existing foreclosure action—prior to the completion or the start of a foreclosure proceeding.
What does the Deed in Lieu of Foreclosure contract mean?
It means two things:
- That you voluntarily transfer ownership of the property to the lender.
- You release or otherwise limit the potential personal liability of the borrower and any related guarantors.
In exchange, you avoid a long-lasting foreclosure process.
What kind of flexibility is there in this agreement?
Terms and negotiations for a Deed in Lieu of Foreclosure are highly negotiable.
Both parties reach an agreement based on a variety of factors. For instance,
- The underlying physical and environmental conditions of the property
- The value of the property
- Potential personal liability of the borrower and guarantors
A typical agreement is similar in content to a real estate purchase and sale agreement.
How we can help
Our attorneys can negotiate the terms to release the property back to the bank in exchange for the amount owed to the bank.
We can negotiate the terms and conditions of a Deed in Lieu of Foreclosure.