A Deed in Lieu of Foreclosure (Deed in Lieu) is a process by which a mortgagor (or a borrower subject to a deed of trust and mortgage note) voluntarily transfers title to the subject property to the lender in exchange for a release from all obligations under the mortgage note.

EXPLAIN DEED IN LIEU OF FORECLOSURE?
This voluntary Deed in Lieu transfer allows the lender to avoid the formalities and expense of a true foreclosure sale of the property. It benefits the borrower in that a Deed in Lieu contract with the lender typically releases the borrower from any potential future personal liability associated with the mortgage note. Additionally, a Deed in Lieu may have much less of a negative impact on the borrower's credit than a formal foreclosure. Although a Deed in Lieu makes logical sense for both parties (the borrower and the lender), it is often not accepted by the lender because lenders feel as if they get "better quality" title by a "trustee's deed upon sale", which would be the manner of title transfer after a formal foreclosure sale. Most specifically, a trustee's deed upon sale permanently eliminates and wipes out any "junior" lien holders such as 2nd or 3rd mortgages, and judgment liens. Obviously the Deed in Lieu process can be technical and complex, especially if you do not have a background in real estate law. That's why it is important to work with a qualified real estate attorney for your Deed in Lieu request. McFarlin & Geurts will more fully explain deed in lieu of foreclosure and consult with you regarding the deed in lieu process at no charge. Our attorneys are equipped to represent all types of borrowers in Deed in Lieu of Foreclosure matters.

CAN I DO A DEED IN LIEU ON MY HOME?
It's difficult to answer "can I do a deed in lieu on my home" because the deed in lieu process is so circumstance specific. Essentially, every case is different and no two borrowers are the same and no two lenders are the same. In order to attempt to answer, "can I do a deed in lieu on my home" we will explain a few of the concepts and criteria to enable you to make your best estimation of "can I do a deed in lieu on my home".

The deed in lieu legal transaction starts after the homeowner has fallen behind on his loan payments and approaches his lender with a loss mitigation or workout request (hopefully through a qualified real estate and deed in lieu attorney). Even if the foreclosure has not started yet, the lender can be approached at any time by a borrower, or their representative to request they accept a deed in lieu rather than continuing with the foreclosure process. The request itself may sound straightforward and simple...just call them up and say "can I do a deed in lieu on my home?" As with any legal matter, things are not so easy. Lenders have certain guidelines they must follow when considering a deed in lieu and the borrower must provide a great amount of documents and information before the request will even be considered. Additionally, the property must typically be listed for short sale for a period of time before the lender considers a deed in lieu...be careful here though, the wrong Realtor (who is not experienced with both the short sale and the deed in lieu process) can ruin the deal and your chances for a deed in lieu. McFarlin & Geurts representatives are available to answer questions such as "can I do a deed in lieu on my home" and address any other concerns you may have.

CREDIT AFFECT DEED IN LIEU?
Analyzing the credit affect of a deed in lieu of foreclosure is difficult because each client's situation is different. Clients frequently ask for a prediction or estimation of the credit affect deed in lieu, but it simply is not possible to predict. Every borrower's circumstances are different, and every lender is different. We can make some generalizations, but can not offer any sort of guarantee, warranty or prediction of result.

The credit affect deed in lieu is typically quite damaging to a borrower, but can be negotiated. In some circumstances, you can negotiate for a "deletion letter" from the lender if there were violations in the manner in which the loan was originated, or alternatively to convince the lender to mark the account as settled with a $0 balance. If one of these outcomes is managed, the credit affect deed in lieu can be virtually zero. Obviously this is an outcome that should not be expected or anticipated, this would be an unusual circumstance. In most cases the credit affect deed in lieu is simply that the account references a voluntary foreclosure. This notation is certainly better than a formal foreclosure, but is damaging nonetheless. McFarlin & Geurts has had success negotiating and mitigating credit affect deed in lieu through "settled" notations and "deletion letters". We are available to consult with you regarding these scenarios, but again, can offer no guarantees, warranties or predictions of result.

It may have been mentioned previously, but is worth mentioning again, a deed in lieu of foreclosure is a fairly involved and complicated legal matter. Answering questions such as "explain deed in lieu of foreclosure", "can I do a deed in lieu on my home", and "credit affect deed in lieu" are really questions that require legal expertise and answering such questions may be considered "legal advice". Keep in mind, only a qualified deed in lieu attorney can offer you any sort of legal advice. A "deed in lieu company", even if loosely "affiliated" with an attorney can not give you legal advice, in fact it is unlawful, and in some cases a criminal offense for these groups to offer legal advice, especially if you are in foreclosure. McFarlin & Geurts attorneys are qualified deed in lieu professionals and can give you the counsel and advice you require to survive this troubling situation.