A deed in lieu agreement is another option for individuals who do not have the financial means to continue making payments on their mortgage but seek to avoid foreclosure. A deed in lieu is an arrangement in which the deed to property is surrendered and any remaining balance on the mortgage is forgiven. This is a good option for some individuals who have substantial equity in their home, but who cannot find a buyer for a short sale.
With a deed in lieu, a timeline will be established regarding turning over the deed and vacating the property. The homeowner may also be expected to pay fees associated with transferring the property to the mortgage lender, and as with short sales, any forgiven principal balance may be subject to a forgiveness tax. This can create an additional tax burden for some individuals, therefore the decision to go through with a deed in lieu arrangement is one that must be carefully evaluated.
If you are considering a deed in lieu arrangement with your mortgage lender, talk to one of our bankruptcy attorneys today. The McCandless Law Firmoffers professional advice and a free, no-obligation case evaluation, so that you can complete information about your legal rights and any choices you may have when it comes to avoiding foreclosure. Contact us in Southern California (909)890-9192 in Northern California(925)957-9797 today to learn about bankruptcy law, deed in lieu arrangements, and your rights and obligations under the law.
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