A deed in lieu of foreclosure occurs when the lender cancels the underlying debt in exchange for the deed. This can be an attractive option because it allows you to walk away from the debt/property on your own terms; allows you to avoid mortgage foreclosure; and it does not have the impact that a mortgage foreclosure does on your credit report. A lender may also be interested in this option because it allows it to avoid the time and fees/costs required to go through with a mortgage foreclosure action.
Some considerations:
- It’s important to have an experienced lawyer handle the process to ensure that the deficiency (amount due after sale) will be forgiven so that there is no fear of a future lawsuit.
- There may be tax issues to consider. You may qualify for relief under the law and/or you may negotiate terms with the lender (reducing the balance etc. etc.). Again, an experienced attorney should be involved in the process to ensure that you get the best solution possible.
- You may not qualify for a deed in lieu if you have other liens on the property (second mortgages, judgment liens, tax liens, etc.). You will need to discuss whether you qualify for a deed in lieu with an experienced lawyer.
Please contact an experienced lawyer at JRQ & Associates if you’re considering a deed in lieu of foreclosure. We offer a free consultation to discuss your situation and advise you of your available options. The bottom line is that an experienced attorney at JRQ & Associates will work aggressively to get you the best possible terms while helping you avoid all of the pitfalls that occur during this process. Call today for your free consultation.
