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Does a Deed in Lieu protect you?

Posted on: 13th Apr, 2010 12:22 am
If I have an investment property in which the mortgage's arm is now due and the payment is $400 more than what I get from my renters. I can't afford to make the payments should I ask for a dee in lieu? What are the chances of them giving me this deed in lieu?
Will I be responsible for the deficit?
Will I be taxed on that amount?
Should I fill for Bankupcy?
Hi mohepmorris,

Lenders generally do not come after borrowers to collect the deficiency from the deed in lieu. Thus, if you do a deed in lieu on the investment property, you are not likely to be responsible for the deficiency. However, in a few instances, lenders are seen to come after borrowers to recover the deficiency from the deed in lieu. Thus, it is important for you to talk to the lender and get it in writing from them whether they will come after you for the deficiency.
Posted on: 13th Apr, 2010 03:39 am
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