Forced Deed In Lieu Of Foreclosure
What Is A Forced Deed In Lieu Of Foreclosure?
A Forced Deed in Lieu of Foreclosure is similar to a standard Deed in Lieu of Foreclosure - but with one big difference. In a situation involving a normal, or "unforced," Deed in Lieu of Foreclosure, the homeowner negotiates with his or her mortgage company in an effort to get the mortgage company to agree to take the home back without the need to foreclose on the homeowner. This process, basically, allows the homeowner to walk away from his or her home and mortgage, sometimes without any deficiency judgment. For more information about a Deed in Lieu of Foreclosure, click here.
Forced Deed In Lieu Of Foreclosure
A Forced Deed in Lieu of Foreclosure ("FDIL"), on the other hand, involves no negotiation or permission from the mortgage company. In that sense, a Florida Forced Deed in Lieu is somewhat akin to apologizing after the fact, instead of asking for permission before the fact and being told "NO." In a FDIL, the homeowner essentially says "here’s my home!" The homeowner sends the mortgage company a package that gives the home, the keys, everything back to the bank. A special warranty deed is prepared, witnessed and notarized, that transfers ownership from the homeowner to the mortgage company, and it is sent to the mortgage company with a letter describing how it benefits the mortgage company and why the mortgage company should accept the deed instead of foreclosing.
A FDIL typically requires an attorney to prepare the documents and put the package together. Documents dealing with land transfers are complex, and homeowners need to be sure things are done properly and this is why having the right deed in lieu of foreclosure information from experienced attorneys is all important.
Risks Involved - The Bank Can Reject A Forced Deed In Lieu
Despite the term "Forced" no one can force the mortgage company to accept the Forced Deed in Lieu of Foreclosure. The mortgage company can choose to reject the FDIL and proceed with foreclosure. And sometimes foreclosure makes sense, particularly if there is a second mortgage or other liens on the home. Also, there is a question of who is actually on the property title itself - and do all the people on the deed want to give the deed in lieu of foreclosure? Do they understand what they are doing? Could someone later claim they didn’t know they were giving up the home and try to undo the transfer? Certain homes and situations make it more likely that a mortgage company will accept a Forced Deed in Lieu of Foreclosure.
Conditions Which Make A Deed In Lieu Of Foreclosure More Likely
Deed in lieu of foreclosure is only likely to happen when all of the following conditions are met:
- The homeowner cannot afford to make payments and foreclosure is imminent and unavoidable
- The homeowner has tried but is unable to sell the home
- There are no other liens, second mortgages, or attachments to the home
- The home needs to be left in good and clean condition
If these conditions are met, the mortgage company may consider accepting the Forced Deed in Lieu of Foreclosure instead of proceeding with foreclosure. But - the mortgage company may still try to collect the deficiency, or require the homeowner to sign a new promissory note, or even file a collection lawsuit. There may also be tax implications with the IRS.
This option should only be considered as a last resort - there are much better and safer options for a homeowner who is facing the prospect of foreclosure. Don’t go through the foreclosure process alone - affordable foreclosure defense is a phone call away! Get the facts and learn about your rights by talking to an experienced attorney at the Byrne Law Group today! Call 813-413-6565 for a FREE consultation.