Sometimes, a bank will agree to waive a deficiency judgment if you give it a deed in lieu of foreclosure and do not contest any foreclosure proceedings. If the difference between the loan amount and the fair market value of the property is great, then this can be a big benefit to you. However, if there is more than one mortgage on the property or the property has other liens on it, then the bank probably will not agree to a deed in lieu. This is because these other lien holders will need to be made parties to a foreclosure action so their liens can be wiped out before the bank gets title to the property. Also, If your property was used as collateral on a second mortgage, then with a deed in lieu you might be able to negotiate a higher value for this property to reduce the total amount owed on the second mortgage.
The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change.
