Re: More Info and More Questions - Posted by JT-IN
Posted by JT-IN on January 21, 2002 at 22:01:04:
Let’s try to clear some of this up for you…
Trashed House: Not a factor to the deed and title issue. It may be a factor to any judgement, or possible criminal damages, depending upon how far the Mortgagor (former owner), wants to push matters.
Not starting FC yet: A non-factor
1a) Yes, this would be a deed-in-lieu of foreclosure, essentially. I would suggest an agreement being structured, identifying what is happening, (signing of the deed, for x dollars). This approach is not all that likely to be fruitful, IMHO.
2a) No foreclosure necessary, once they have clear title to the property. However, and this is a big however, as there should be a thorough title search performed first, prior to the Mortgagor accepting any deed. Why, you say? What if there is a huge fed’l tax lien recorded to the property, or a judgement against the present owner for x, y, or z; you name it! Once the deed transfers, so does any lien. Many lenders will not accept a deed-in-lieu-of, for this very reason, as they prefer to foreclose and clean-up the title, if need be. I cannot stress the importance of this issue enough!
3a) If Mortgagor accept a deed-in-lieu-of, then yes they are waiving any deficiency judgement, and hopes to collect same, unless the structured agreement, as mentioned in 1 above, does address this issue with the Mortgagee essentially agreeing to damages. Don’t hold your breath for this to happen!
The cleanest, clearcut route is to proceed with a foreclosure action ASAP; it is what I would do, or have done long ago. These folks are obviously intimidated by this course of action, and the possible unpleasant dealings of this. Maybe you should test their interest in unloading this problem on you, or another willing investor.
In all the above posting, I did not see the state mentioned, where these proceedings will take place. If so, I missed it. Best of luck on this one…
Just the way that I view things…