Advantages and Disadvantages of a Deed in Lieu of a Foreclosure
When you are facing losing your home due to a foreclosure, it can be a scary time. You may not realize some options may save your home. Others can help eliminate your financial responsibility. One possible alternative could be a deed in lieu of a foreclosure. If you are hoping to assert a mortgage foreclosure defense, you need to speak with an experienced West Palm Beach deeds in lieu of foreclosure attorney. Taking swift action in a potential foreclosure case is imperative.
There are several types of mortgage defenses, including a loan modification. If they refuse your request, or you cannot reach an agreement, then they might agree to a short sale. If your home doesn’t sell in a short sale for a reasonable price, the lender might agree to a deed in lieu of foreclosure.
How a Deed in Lieu of Foreclosure Works
What happens with a deed in lieu of foreclosure is that you hand the bank your property title. In exchange, the bank accepts the deed as full settlement of your entire debt. In very limited cases, some banks may allow you to set up a rental agreement to remain in your home. However, that only happens in rare situations. The terms of a deed in lieu of foreclosure are negotiable, which is why it’s crucial to retain a skilled attorney who has experience with foreclosure matters in Florida.
Advantages of a Deed in Lieu of Foreclosure
One of the main benefits is that it releases you and anyone who owes on the mortgage, provided there are no terms in the agreement that are to the contrary. Another advantage to you is the ability to avoid the expense, publicity, and time involved in the necessary legal proceedings to enforce your mortgage loan and related obligations.
The lender may agree to pay a portion, or even all, of the expenses related to the transfer. If there is equity in the property over the debt, they may also provide some monetary consideration. However, this amount will almost always be less than what a third party would pay.
As previously mentioned, there is a small chance the lender might be willing to grant limited property rights to you. That would be a lease that allows you to remain on the property or have the right of first refusal. These agreements are rare but could be potential advantages in some cases.
Disadvantages of a Deed in Lieu of Foreclosure
The most obvious disadvantage to you is the loss of your property, any income from the real estate, and your home investment. There are tax costs associated with the conveyance of property as well.
Choosing the Right Foreclosure Attorney in Florida
Choosing the right attorney in a foreclosure matter is very important. You need an attorney who understands the differences between releasing a lien on your property versus a full release of your debt. Failure to secure a full release of your liability means that the mortgage lender could still pursue a deficiency judgment against you to collect the rest of your debt. An experienced West Palm Beach foreclosure attorney will make sure your liability is fully released. Contact the Law Offices of Larry E. Bray, P.A. today to schedule an initial consultation.