This deed serves to transfer title of real estate from an owner/borrower back to the lender in lieu of a lender going through a foreclosure process. Typically used in friendly situations where a borrower has defaulted on a loan and the lender has agreed to take back the property in full satisfaction of the outstanding debt, it saves the parties the time and expense of a statutory foreclosure process. However, a lender must be wary in these situations, since by accepting a “Deed in Lieu” they are taking back the property subject to any liens or encumbrances which may have attached to the property during the borrower’s ownership. If there is any question as to the lien status of the property, a lender would be wise to conduct a formal foreclosure (which serves to wipe out any subordinate liens). However, if a “Deed In Lieu” is acceptable to the parties, you can obtain one by filling out the questionnaire below.
Documents to be prepared for you: “Follow-Through” Instructions, Deed in Lieu of Foreclosure.