Posted by Natalie-VA on March 18, 2006 at 14:35:44:
David,
Couldn’t you also argue that a deed with conditions isn’t valid? In other words, one of the valid elements of a deed is acceptance. If it has conditions (like it’s not valid unless the borrower doesn’t pay), then you could argue that you don’t have acceptance.
Hi all. I am about to use a new hardmoney lender. They want me to sign a deed in lieu of foreclosure - which I don’t really mind, frankly. I’d do it if it were my money.
My title company says it won’t stop the foreclosure process and that they would stilll have to foreclose me out (I’m in Indiana). Any suggestions on what would accomplish the same thing, or is the title co attorney incorrect?
I have given a deed to be held in case i did not pay several times. I have done this when the seller was holding the note and either my attorney or the sellers attorney held it in escrow with instructions of when it could be released and i never have had a problem
Posted by John Merchant on March 19, 2006 at 12:22:06:
A “deed in lieu” if dated after the deed to you was dated and notarized and recorded, would effectively convey title to the lender. …and there would be no need or purpose served by his spending time and money foreclosing on you.
BUT, before you agree to such, you should have a simultaneous written agreement from the lender that he would not, under ANY circumstances then proceed to foreclose on you…and that if he ever recorded his deed in lieu from you, that would constitute a full release of any and all liability from you to him…and I’d make sure the deed recited same.
I’d tell them NO…I have only heard of this being done…legally…one time and under very strict conditions with very explicit legal instructions to two escrow companies…one for the buyer and one for the lender.
What assurance do you have that they will not record the deed-in-lieu at their convenience?
I’d tell them to raise the interest rate, ask for more collateral, etc…but NO to a deed in Lieu.
Your title company is probably right. A deed signed in advance, un-dated and noterized alone with an option from you to the lender, may serve the security need of the lender. What the lender is trying to do is avoid the expensive foreclosure process. The lender, if they are concern about being paid, could ask for additional colleteral.
It is unusual for a lender to request a deed in lieu of F/C. I’d tell them NO!
you can’t notarize an undated deed… - Posted by David Krulac
Posted by David Krulac on March 18, 2006 at 11:40:48:
part of the notary process is that the instrument has to be dated to confirm that the notary license has not expired. And if the deed wasn’t dated the date would be assumed to be the date of notarization.