Dec 27 2012
You are behind on your mortgage payments, you don’t have the money to catch up and a foreclosure seems imminent….. does this sound familiar? If so, unfortunately you share the same worrisome position as thousands of other Florida home owners that were impacted by the housing collapse of the mid to late 2000′s. However, prior to a foreclosure judgment being rendered, your best option may be to give the property up entirely and start anew. The legal terminology used to specifically describe this alternative to foreclosure in Florida is a “deed in lieu of foreclosure”. You may have heard the term thrown around here and there, but you may be wondering what are its legal ramifications, and how can you determine if this is the best solution for your particular scenario.
First off, a “deed in lieu” is tantamount to you, the borrower, saying to the Lender (often times the bank), “I cannot make the mortgage payments anymore, so I am going to give the property back to you.” Essentially, the bank agrees to take back ownership of the property (repossession of the deed), and in exchange, the borrower is relieved from any further payments or obligations on the subject property. Deed in lieu’s can allow the defaulting borrower to get out from underneath the cloud of an impending foreclosure in Florida, and avoid the strain and heartache of the often times long and drawn out foreclosure process. Furthermore, while a borrower’s credit score will inevitably take a hit upon the initial filing of a foreclosure action, a deed in lieu can help mitigate the significant financial damage that comes along with an actual foreclosure judgment. Not only can a deed in lieu be in the best interest of the borrower, but often times they can be beneficial to the lender as well. As previously stated, the full Florida foreclosure process can be a painfully slow one, and not just for the borrower. This increased time inevitably leads to increased costs for the lender. Thus, under the right conditions, a “deed in lieu” may be the most viable alternative to foreclosure for both parties.
However, it is absolutely imperative that any time a deed in lieu is sought, that the borrower FIRST obtain a “waiver of right to deficiency judgment” from the bank PRIOR to signing a finalized agreement for a deed in lieu. This waiver ensures that the lender cannot later come back and require you to make up the monetary difference if they end up having to sell the property for less than what was owed.
Overlooking even the smallest of details, such as failing to obtain the aforementioned “waiver of right to deficiency judgment”, can result in severe financial implications felt long after the foreclosure process has come and gone. For these very reasons, it is crucial that you consult an experienced team of Orlando foreclosure attorneys that can help ensure your rights are being fully honored and protected.
Call the experienced Orlando foreclosure attorneys at The Freedom Law Firm - we’re here to help you stay in your Orlando home! Call any time, day or night. We have the experience and knowledge needed to answer your Florida foreclosure questions. 407-883-2618.