deed in lieu of foreclosure

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deed in lieu of foreclosure

An instrument transferring title to real property to a mortgage lender without the necessity of going through the foreclosure process. Called the deed in lieu (pronounced “loo”) for short, the procedure is attractive to lenders because of the speed, lack of any defenses, and removal of anxiety about last-minute borrower bankruptcy. It is attractive to borrowers because there is no foreclosure to appear on the credit records.There is some risk to the lender if there are intervening liens,because a deed in lieu transfers title to property subject to the effect of any junior liens.Usually a foreclosure destroys other liens,if they were recorded after the mortgage or deed of trust.

Deed in Lieu of Foreclosure

Deeding the property over to the lender as an alternative to having the lender foreclose on the property.

See Payment Problems/Position of the Lender/Permanent Problem.

References in periodicals archive ?
Many loans are tied up in securities, and banks now with adequate reserves are arranging deed-in-lieu and short sale agreements themselves.
Also, deed-in-lieu transactions fell off sharply from a year ago.
This resource now contains eligibility surveys for government programs offering help to distressed homeowners, including the Home Affordable Foreclosure Alternatives Program, or HAFA, which increases the likelihood of a short sale or deed-in-lieu of foreclosure.
Manhattan-based real estate firm Delshah Group filed suit in New York State Supreme Court, seeking a court order to block the transfer of a deed-in-lieu of foreclosure for Zamir Equities' Setai Wall Street, at 40 Broad Street.
The company contributed approximately USD2.0m in reduction of the loan, turned the property over to the lender pursuant to a deed-in-lieu transaction, and was relieved of the USD26.4m obligation and a USD6.7m repayment guaranty.
Tenders are invited for Real Estate Auctioneer will be responsible for conducting public auctions, live and/or web-based, for select properties acquired by CHFA through foreclosure or deed-in-lieu of foreclosure.
The firm finalized a $20.5 million transaction, purchasing two non-performing senior notes secured by a group of nine net-leased properties and simultaneously assuming ownership through a deed-in-lieu (DIL) of foreclosure agreement.
However, lenders in other states should remain cautious and approach a deed-in-lieu transaction in the same manner as if it were a real estate purchase outside of a loan context.
The 1925 three-story Art Deco building is located one block south of Lincoln Road's pedestrian mall and had been in the hands of private lender Pinetree Partners since March 2009, when it was acquired in a deed-in-lieu of foreclosure from developer Neptune Premier Holdings.
The deed-in-lieu activity showed a decline of 20 percent in November compared with October.
The deed-in-lieu of auction wipes out the value of the junior debt, they'd argued, allowing CW to reap an "unearned windfall" when the property is sold.
Upon acquisition of its portfolios, G8 Capital s approach is to work closely with borrowers to assess their situation and determine the best work-out solutions, which may include a short-sale, obtaining deed-in-lieu of foreclosure, or restructuring the loan.