Deed in Lieu of Foreclosure Lawyer
Representing Clients In Real Estate Matters Since 1994
A “deed in lieu of foreclosure” is an option to stop foreclosure of your home and avoid a deficiency judgment. With a deed in lieu, you voluntarily turn the deed over to the bank, and walk away from your home in exchange for cancellation of the mortgage.
This means that the lender promises they will not sell your home at a foreclose auction or seek a deficiency judgment.
As with a short sale, a deed in lieu may be the right option when the loss of your home best serves your interests. For instance, if you know you cannot possibly afford a payment plan even through loan modification, this may be an appropriate alternative to foreclosure. Although you lose your home, your mortgage will immediately be considered paid in full without further obligation.
Qualifications for a Deed in Lieu of Foreclosure
- You have suffered a hardship such as job loss, divorce or illness
- In most cases, the property is your primary residence
- Some lenders may require that you try to sell your home for its fair market value for at least 90 days
- Some lenders require that there be no other liens on the property such as tax liens or second mortgages on the property
Positives to a Deed In Lieu of Foreclosure
- Avoiding a deficiency judgment without filing bankruptcy
- Your credit will suffer less damage than it would with a foreclosure. We may be able to negotiate with your lender’s attorney to report your mortgage as paid in full in an effort to minimize the impact on your credit rating.
- You protect your privacy from a public foreclosure.
- Many banks will offer payment to homeowners willing to execute a deed on lieu of foreclosure. This is referred to as “cash for keys.” Some reports have said that cash for keys offers have been as high as $30,000.00 (where there was significant mortgage fraud).
- Since there will not be a foreclosure sale on your credit, you should be able to qualify for a government backed mortgage after 3 years, instead of 7 years.
Negatives to a Deed In Lieu of Foreclosure
A deed in lieu should be carefully considered against all other defenses and alternatives to foreclosure. In many cases, the risks outweigh the benefits.
- You lose your home. Once you sign the title to your property over to the bank, you move out usually within a specified period of time.
- Since the bank requires you to attempt to sell your home first, you may be burdened with attempting to complete a short sale.
- As with a short sale, a deed in lieu of foreclosure is considered a debt that is forgiven – and the resulting “forgiveness” (the difference between the amount owed and the amount of actual sale of the property) can be counted as income by the IRS. If the property is your principal home and certain other conditions apply, you may be exempt from being taxed.
- There may be negative consequences to your credit rating with a deed in lieu.
Deed In Lieu Criteria – Foreclosure Alternatives
There are other criteria to consider when applying for a deed in lieu, and every situation is unique. We can help and advise on these issues as well as on other foreclosure alternatives (short sale).
Larry helps clients who are facing foreclosure by guiding them through the various issues related to the loss of their Florida real estate, including Short Sale advice, Deficiency Judgment counseling, Wrongful Foreclosure, Loan Modifications, loss or sale of property at the Foreclosure Sale while pursing a loan modification or short sale and defects or fraud in the mortgage foreclosure process, including lost Promissory Notes, Improper Mortgage Assignment, and the failure to be served with the foreclosure lawsuit or other documents.
Get A Free Case Evaluation – Call (954) 458-8655
Contact Larry to find out how he can help you. You can contact him by phone at 954-458-8655 or by e-mail through this web site to schedule an appointment so he can help you with your mortgage foreclosure issue. He offers a free initial consultation.
To learn more about Larry Tolchinsky, click on this link: Florida Real Estate Lawyer
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