What is a Deed in Lieu of Foreclosure?
A Deed in lieu of foreclosure is when a homeowner voluntarily surrenders the real property, giving it back to the lender in exchange for a release or satisfaction of the mortgage. The deed, the legal document which conveys ownership of real property, is given to the lender in lieu of (instead of) the lender having to file a foreclosure complaint and use the courts to satisfy the debt or acquire the property at judicial sale. This option is sometimes attractive to lenders because it spares them the expense and time of the legal work required to complete a judicial foreclosure. It is attractive to struggling homeowners because it terminates the future payment obligations under the mortgage, and usually releases them from most or all of the past due payment obligations. Although individual situations vary, it is typically an even exchange: ownership of the property is surrendered by the homeowner and the lender agrees to forego collection of most or all past due and future amounts that would otherwise be due under the terms of the note and mortgage. Because each case is unique it is recommded to meet with a deed in lieu attorney in Jacksonville to assess the case and determine what options are available.
The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principal advantage to the borrower is that it immediately releases him/her from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure. Another benefit to the borrower is that it hurts his/her credit less than a foreclosure does. Advantages to a lender include a reduction in the time and cost of a repossession, lower risk of borrower revenge (metal theft and vandalism of the property before sheriff eviction), and additional advantages if the borrower subsequently files for bankruptcy.
What is Required for a Deed in Lieu of Foreclosure?
In order for us to get a real estate Deed in Lieu of Foreclosure in Florida accepted for you, we first must list your home for sale. During the listing period, you will need to provide the following documents to us so that we may package a real estate Deed in Lieu of Foreclosure request to your existing mortgage lenders.
List of Documents Needed For a Deed in Lieu of Foreclosure:
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Proof of Previous Short Sale Attempt (Listing History from Short Sale Realtor)
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Most recent two months of bank statements for savings/checking accounts
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Most recent month of paystubs
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Current mortgage payment coupons/statement for existing mortgages
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Last two years tax returns and any tax schedules
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Hardship Letter
**Sample List Only- Your Lender may require different documents.
With these documents we create a package and work with your lender to see if we can negotiate a Deed in Lieu of Foreclosure on your behalf. Lenders typically require you to have attempted a short sale for at least 90-180 days before they will entertain any discussion about a deed in lieu of foreclosure in Florida.
Who Can Qualify for a Deed in Lieu of Foreclosure?
Typically, the mortgage lenders will only accept a Deed in Lieu of Foreclosure if you are at least one month behind on your mortgage payments, don't have a ready and willing buyer for a short sale and you are unable to debt service all of your existing liabilities. Also, if you financial situation has changed and you are currently making less money than before and you have no more savings, you most likely qualify for a real estate Deed in Lieu of Foreclosure. This is the reason why we need the above documents to paint a clear financial picture of your current situation. A Deed in Lieu of Foreclosure Attorney can help you decide if a deed in lieu is the best option for you.
For more information on how our services could benefit you please call The Law Offices of Justin McMurray, P.A. at (888) 316-2131 for a FREE initial consultation. That is (888) 316-2131for a FREE consultation with a deed in lieu of foreclosure attorney.
