Deed in Lieu of Foreclosure - defined

I've said this before, but it should be repeated.   I'm not a lawyer, and I've never even played one on TV.  But in this unusual real estate market, I am learning very quickly about all the different ways that lenders and sellers can reconcile a mortgage agreement gone sour. 

Deed in Lieu of Foreclosure is when the homeowner basically throws up their hands before the foreclosure process even begins, or maybe during the early stages when they've missed some payments, and just hands over their home to the bank.  This skips the foreclosure process and allows the homeowner to just move out and get on with their life.  In some situations homeowner can negotiate the timing of when they will actually move out.  The one catch is that you've got to try selling the home before the bank is allowed to go forward with Deed in Lieu of Foreclosure.  I'm not sure why this is the case, but apparently that is the law.

I learned about this because I have two properties that I am trying to sell that may end up back in the bank's hands (via Deed in Lieu of Foreclosure) if I don't sell them within 6 months.  Both owners owe more to the bank than the properties are currently worth, so they are both short sales.  You can check out my archives for previous posts on short sales if you want more information on that.

Short Sale in Highland Park - 2206 Kipling 

Short Sale - Vacant Land on Westview in Des Plaines   

Contact your lawyer if you need more information about your particular situation.  Or, I know two lawyers with expertise in this area - give me a call for a referral: 847-226-5594

As always, if you know someone that is thinking about buying or selling a home, please have them give me a call.  To search for any property for sale in the Chicago area, go to my website.

Thank you for reading!

nsk

Comments

[Marilyn]

This is a good article, its a sad sight when you hear about all the foreclosures.

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