What happens in a Deed in lieu of Foreclosure?

dianeandelmer · Joined: 29 May 2007 Posts: 1 1.23 Dollars($)

I hold a second mortgage on property which the owner now is doing a deed in lieu of foreclosure. Will I loose my money or what happens?

blue · Posted: Tue May 29, 2007 3:29 pm Post subject:

Hi Diane,

Welcome to Mortgagefit discussion board.

If there is a second mortgage on the property I doubt the first mortgage holder will agree to take it over using a deed in lieu of foreclosure. The reason is, in such situation the second mortgage lien will remain on the property and in future if the lender wants to sell it, second mortgage will have to be paid off.

Do you have information that the first mortgage holder has agreed to a dil?

Thanks
Blue

miller_st · Joined: 17 Jan 2007 Posts: 917 168.82 Dollars($)

I also do not think the 1st mortgage holder will agree to accept a dil.

If however the 1st mortgage lender does accept a dil then he will have to pay you the balance amount borrower owed to you. He will have to pay you the balance amount at the time he sells the house.

Miller

adonis · Posted: Tue May 29, 2007 10:58 pm Post subject:

Hi Andelmer,

How can owner do deed in lieu of foreclosure on the property for which you hold second mortgage.

Generally, Deed in lieu of foreclosure cannot applicable on the property when there are some junior liens on the property.

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