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keland · Joined: 24 Feb 2010 Posts: 2 1.56 Dollars($)

I thought I could just give a deed in lieu to avoid foreclosure but my 2nd mortgage lender told me that I can not give them a deed in lieu. They told me that even if I surrender the property back to the 1st mortgage they , as the 2nd mortgage holder, can still hold me responsible for the balance and garnish my wages or pursue other recovery methods. Would I be better off to just let it all foreclose??

adonis · Posted: Thu Feb 25, 2010 12:18 am Post subject:

Welcome keland,

If your first lender accepts the deed in lieu, then he would forgive the deficient amount resulting from the sale for the first loan. However, the second mortgage lender will be able to collect his dues from you. He can garnish your wages or place a lien on your other properties if you do not pay him off.

If you go for a foreclosure, then both the lenders would be able to come after you for the balance amount. Thus, it's better to go for a deed in lieu.

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foreclosure vs. deen in lieu