Posted on: 29th Sep, 2008 06:20 pm
i bought a house from a friend, & she became my lender. we have and installment note that i can no longer pay for. since i can no longer meet my obligations, i told her that i rather do a deed in luie of foreclosure & give the house back. she has agreed to take the house back but all the paper work she wants me to sign is a grand deed, granting the property back. if i sign this, does it mean that i am released of all financial liabilities w/her? can she in the future come after me for money? let's say i buy a house & years later it has a lot of equity, can she put a lien on my property to recover whatever money i didn't pay her? or does deeding the house back cures all my debt? i only had one loan w/her & i never refinanced. what type of paper work should i sign in this situation? i was told to sign a quit claim deed & also the grant deed. is this the most economical way to go? i want to make sure i'm protected. please help. thanks
Hi vargaspr!
Welcome to forums!
Yes, your friend is absolutely right when she asks you to sign the documents. Deed in lieu involves the signing of the Agreement in Lieu of Foreclosure and a Warranty deed, quit claim deed or a grant deed. Agreement in Lieu of Foreclosure states the terms and conditions of the deed-in-lieu and this agreement is signed by both the lender and borrower. The second document conveys legal ownership of the property to the lender.
The lender will give you a note as "paid" and provide you with two forms in which one will state that the debt is canceled and the other will state the waiver of the right to a deficiency judgment. After this, the escrow will record the deed. Once the process is complete, the lender will sell thr property and recover the debt.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
Yes, your friend is absolutely right when she asks you to sign the documents. Deed in lieu involves the signing of the Agreement in Lieu of Foreclosure and a Warranty deed, quit claim deed or a grant deed. Agreement in Lieu of Foreclosure states the terms and conditions of the deed-in-lieu and this agreement is signed by both the lender and borrower. The second document conveys legal ownership of the property to the lender.
The lender will give you a note as "paid" and provide you with two forms in which one will state that the debt is canceled and the other will state the waiver of the right to a deficiency judgment. After this, the escrow will record the deed. Once the process is complete, the lender will sell thr property and recover the debt.
Feel free to ask if you have further queries.
Sussane