Posted on: 17th Jun, 2009 05:28 pm
Does the lender have to accept a deed in-lieu from the borrower?
when you go for a deed in lieu in order to avoid foreclosure, you need to sign legal documents such as the agreement in lieu of foreclosure and a warranty deed, quit claim deed or a grant deed. the first document reveals the terms and conditions of the deed-in-lieu, and is signed by both the lender and borrower. the second document, which is the deed, conveys legal ownership of the property to the lender.
the lender marks the borrower's note as "paid" and provides the latter with two forms - one which states that the debt is canceled and the other which refers to the waiver of the right to a deficiency judgment (the lender's right to ask for the unpaid debt amount if it is not recovered totally by the property-sale).
the agreement for deed in lieu of foreclosure is executed through an escrow company which receives the borrower's note (marked as "paid") from the lender. the escrow then records the deed used for transferring legal ownership of the mortgaged property and sends the note to the borrower. the borrower is thus released from the liability of the mortgage payments.
the lender marks the borrower's note as "paid" and provides the latter with two forms - one which states that the debt is canceled and the other which refers to the waiver of the right to a deficiency judgment (the lender's right to ask for the unpaid debt amount if it is not recovered totally by the property-sale).
the agreement for deed in lieu of foreclosure is executed through an escrow company which receives the borrower's note (marked as "paid") from the lender. the escrow then records the deed used for transferring legal ownership of the mortgaged property and sends the note to the borrower. the borrower is thus released from the liability of the mortgage payments.