What are the short term and long term legal ramifications of a deed in lieu of forclosure?
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What are the short term and long term legal ramifications of a deed in lieu of forclosure?
What is a deed in lieu of forclosure, and what should I be aware of?
Asked on April 12, 2011 under Real Estate Law, New Hampshire
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Offering a deed in lieu of foreclosure means that you as the borrower transfer your interest to the holder of the note - the lender - to satisfy the loan that is in default to avoid foreclosure proceedings. What you need to be careful about in the transfer is that the lender waives any right to a deficiency judgement against you. This is important because the lender has the right to sell the property and if the sale price does not cover the underlying loan then you will be responsible for the remaining balance. Seek some help in your area before you sign over anything. Someone needs to read over the documents for you to protect you. Good luck to you.
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