Deed in lieu

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My mother lives in South Florida and bought a condo approximately 2 years ago for about 130k. Due to a property owners assoc issue and hurricane insurances, the HOA has gone from 180 to over 300. The market has tumbled and there is a unit currently listed for 55k in the bldg. This is an investment property (go figure). She can't rent the property and is receiving no interest at all. What are her options? If she forecloses, will she have to pay money back. I hear deed in lieu does not require a judgement, but will the bank accept the property when she still has over 110k on the note? Thank you.

sara · Posted: Wed Sep 10, 2008 4:00 am Post subject: RE: will bank accept property?

Hi Taylor,

Welcome to the forums.

It's true that in most cases, if a borrower goes for deed-in-lieu (dil), he may not have to pay the deficiency judgment. It depends upon the bank's policies as to whether it will accept the dil. What matters is, whether it will be able to sell property at a price enough to recover the mortgage balance.

However, if your mother's house is foreclosed, she'll have to pay the deficiency, if any.

Take care

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