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joannehamel · Joined: 08 Feb 2010 Posts: 1 1.38 Dollars($)

What is the exact procedure to complete a deed in lieu of foreclosure for the state ot Tennessee? Which documents come first, second, etc.?
Which are the documents that need to be signed? At what time do I receive the note marked as "Paid in Full".
I am deeding back 9 properties to a private lender in lieu of foreclosure. He is worried that the title might not be clear and won't pay for a title search.
A paragraph in the document sent to me by his attorney stipulates that the interests of grantee shall not merge with the interest of Lender under deed of trust...
This leaves me open to be sued for the loan in the future.
How do I get out of this? I want to be free and clear of the loan and free and clear of the property taxes that were not paid since last year.
Thank you,

jenkin7 · Posted: Mon Feb 08, 2010 11:45 pm Post subject:

Hi joannehamel,

In a deed in lieu of foreclosure, you as the borrower simply sign over the property deed to the lender. The lender will not have to pursue foreclosure to take over the ownership of the property. Once the deed has been transferred to the lender, he can sell off the house to satisfy the mortgage lien.

You are not supposed to receive a note marked "paid in full", unless the lender can sell the house to recover the loan in full. If the house sells for less than what is owed, you will be liable for a deficiency and the lender can come after you for it. However, in most of the cases lenders forgive the deficiency from a deed in lieu. If your lender says he won't come after you for the deficient amount, get it in writing from him.

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Procedures for a Deed In Lieu