Friendship Properties

Deed in Lieu

 

What is 'Deed in Lieu' of Foreclosure?

    A deed in lieu of foreclosure is a deed instrument in which a mortgagor (the borrower) conveys all interest in a real property to the mortgagee (the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.

    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. 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.

    The lender will likely not want to assume the liability of the junior liens from the property owner, and accordingly, the lender will prefer to foreclose in order to clean the title.


In order to be considered a deed in lieu of foreclosure:

    · The indebtedness must be secured by the real estate being transferred.

    · Both sides must enter into the transaction voluntarily and in good faith.

    · The settlement agreement must have total consideration that is at least
        equal to the fair market value of the property being conveyed.

    · If there are any junior liens a deed in lieu is a less attractive option for the lender

 

    Sometimes, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair value of the property. Other times, lenders will agree since they will end up with the property anyway and the foreclosure process is costly to the lender.

    Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations.
Neither the borrower nor the lender is obliged to proceed with the deed in lieu of foreclosure until a final agreement is reached.

    You must be advised however that mortgage servicers and investors write their own guidelines under the Federal requirements to determine how to implement the program. For more information about your options, you should contact your mortgage servicer. If you have questions about the program, or want guidance about how these options may impact your personal situation, you may wish to speak to a HUD-approved housing counselor for free.

 

As a full-time, full-service, CT licensed Real Estate professional & short sale specialist,
my area of expertise is in helping Connecticut home sellers
get their homes sold quickly and easily for top dollar.




For more information or questions about
Short Sales and Loan Modifications
Call Me @ 203-457-9991


As a full-time, full-service, CT licensed Real Estate professional & short sale specialist,
my area of expertise is in helping Connecticut home sellers
get their homes sold quickly and easily for top dollar.


    Our company does ‘Short Sales’ as well as list and sell residential homes, condominiums and multi-family properties in Litchfield, Fairfield, New London, Middlesex and New Haven Counties including:

Allington, Bakersville, Bantam, Barkhamsted, Bethlehem, Bridgewater, Canaan, Colebrook, Cornwall, East Canaan, East Morris, Falls Village, Goshen, Harwinton, Kent, Lakeville, Litchfield, Milton, Morris, New Hartford, New Milford, Norfolk, North Woodbury, Northfield, Northville, Oakville, Pequabuck, Plymouth, Roxbury, Sharon, Terryville, Thomaston, Torrington, Warren, Washington, Watertown, Winchester, Winsted, Woodbury, Ansonia, Beacon Falls, Bethany, Branford, Cheshire, Derby, Devon, East Haven, Guilford, Hamden, Madison, Meriden, Middlebury, Milford, Naugatuck, New Haven, North Branford, North Haven, Orange, Oxford, Prospect, Seymour, Southbury, Union City, Wallingford, Waterbury, West Haven, Wolcott, Woodbridge, Centerbrook, Chester, Clinton, Colbalt, Cromwell, Deep River, East Haddam, East Hampton, Essex, Haddam, Higganum, Ivoryton, Killingworth, Middlefield, Middletown, Moodus, Old Saybrook, Portland, Rockfall, Westbrook, Westfield, Winthrop, Berkshire, Bethel, Branchville, Bridgeport, Brookfield, Byram, Cos Cob, Danbury, Darien, Easton, Fairfield, Georgetown, Glenville, Greenfield Hill, Greenwich, Hawleyville, Huntington, Long Hill, Lyons Plain, Mill Plain, Monroe, New Canaan, New Fairfield, Newtown, Nichols, Noroton, Noroton Heights, Norwalk, Redding, Redding Ridge, Ridgefield, Riverside, Sandy Hook, Saugatuck, Shelton, Sherman, Southport, Stafford, Stamford, Stepney, Stratford, Weston, Westport, Wilton.


Local Banks we do Short Sales with in Connecticut:

Webster Bank, Liberty Bank, Union Savings Bank, First County Bank, Dime Bank, Rockville Bank, Castle Bank, Putnam Savings Bank, New England Bank, Salisbury Bank, Farmington Savings Bank, Fairfield County Bank, NewAlliance Bank, Connex Credit Union, Newtown Savings Bank, Savings Bank of Danbury, Thomaston Savings Bank, Litchfield Bancorp, Naugatuck Valley Savings and Loan, Savings Institute Bank, Connecticut Community Bank, The Citizens National Bank, Jewett City Savings Bank, Eastern Federal Bank, Stafford Savings Bank, Darien, Rowayton Bank, The Milford Bank, First Niagara Bank, Guilford Savings, Torrington Savings Bank, Peoples, Chelsea Groton.


National Banks we do Short Sales with in Connecticut:

American Home Mtg, Aurora, Bank of America, Bank United, Citi, Citizens, Countrywide, Chase, Dime Savings, GMAC, HFC, HSBC, Home Loan Servicing, IndyMac, Litton, Liberty, M&T Bank, Midland Bank, McCue Mtg, Nationstar Mtg, Navy Federal Credit Union, Ocwen Financial, OneWest, PNC Bank, Saxon Mtg, Sovereign, TDBank, Wachovia, Wells Fargo, Weststar Mtg, Rose Mtg, Quicken Loans, Coreplus, Bank United, Suntrust, Cambell Financial, NE Moves Mtg, Emigrant, Eastern Federal, Union Trust, Ameriquest Mtg, Wilminton Finance, US Bank, Savings Institute, Total Mtg, Northside Mtg, Novastar, CTX Mtg, American Mtg, Astoria Federal, CCO Mtg, Washington Mutual, RBC Mtg, Flagstar Bank, First Magnus, Accredited Home Lenders, First Franklin, Merill Lynch Mtg, Great Western, TD Bank, GMAC Mtg, Sears Mtg, Option One Mtg, and many more.


Government Agencies in Connecticut: FannieMae, FreddieMac, VA, FHA, CFHA

 


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TESTIMONIALS

    "I was very happy to have Phil work with me to sell my home. Phil scheduled all meetings and showings at my convenience and quickly returned all phone calls. He promptly had advertising in place and he provided me with excellent advice about how to prepare my home for sale via a short sale. He worked hard, illustrated a great understanding of contract details, negotiation and documentation. I really appreciated Phil's expert advice throughout the entire short sale process. Phil was the outstanding professional I was looking."

- Rich H. (West Haven, CT)

    "We are very grateful! We put our faith in you and in the process and it worked out. Even if right now we were still waiting..we were thankful for you and that you answered all my calls and listened when things seemed bleak with the weather we endured this winter. I had my "worry angel" too! We know the short sale process could have taken even longer, but having you there to see us through, no matter how long it may have taken, was very reassuring. We would recommend you to others."

- Robin Q. (XXX, CT)

    "Phil is the best realtor I have ever worked with! Like many people, my wife and I were caught in the housing market collapse and had to short sell our house. Phil made the process as easy as it could be. He knows the process cold from beginning to end negotiates tenaciously with your bank. Phil was on the ball with everything. 

Thanks again for the great service"
- Ken H. (XXX, CT)

Hi Phil

    "Sorry I didn't email you before. All I want to say is that I'm really grateful for helping me with the sale of my condo. Thanks for your patience and the long hours spent for this to happen. I fell sooo relieved I don't have a court issue or a huge debt."

- Carolina P. (North Haven, CT)

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