Deed in Lieu of Foreclosure
How can I do a Deed-in-lieu of Foreclosure?
Deed-in-lieu of Foreclosure– Occurs when the lender accepts ownership of the property in place of the money owed on the mortgage.
Basically, you simply sign over the property to the bank to avoid foreclosure.
Sounds easy, right? Not so fast!
Most lenders will require that the homeowner first attempt a short sale before they will even consider a Deed-in-lieu of foreclosure. Additionally, having multiple lenders can complicate things even further. We have yet to see a Deed-in-lieu accepted on a property with multiple lenders. Therefore, we don’t see Deed-in-lieu of Foreclosure as a viable first option for distressed homeowners.
However, things may be changing, we recently received a call from a client who has been asked, by their lender, if they are interested in completing a Deed-in-lieu of Foreclosure. We will have to see if this is an isolated occurrence or the new trend.
Foreclosure Defense Attorneys
Call the Law Firm of Vaughn, Weber & Prakope, PLLC at 516-858-2620 to speak with a foreclosure attorney.
Foreclosure Settlement Conferences
What you should know about Foreclosure Settlement Conferences!
Residential foreclosure defendants in New York are entitled to a preliminary foreclosure settlement conference that may enable a speedier and less expensive way of resolving their foreclosure issue than would otherwise be possible. The law requiring the conference – New York Civil Practice Law and Rules section 3408 – is beneficial for foreclosure defendants in a number of ways.
- First, foreclosure settlement conferences are typically less expensive than trial. Thus a foreclosure settlement conference requirement alone is beneficial. But section 3408 does not simply require a conference – it also requires that parties engage in good-faith negotiation for the purpose of “determining whether the parties can reach a mutually agreeable resolution to help the defendant avoid losing his or her home.” Further, the law requires that parties periodically update the court about the negotiation, allowing courts to evaluate whether negotiations are made in good faith. It is rare that legislation requires parties to make good-faith efforts to reach a resolution that is favorable to the defendant, and foreclosure defendants should take advantage of this requirement.
- Additionally, the law requires that the settlement conference occur within sixty days of the day proof of service is filed with the court, unless the parties agree to conference on another date. This allows foreclosure defendants to enter negotiations quickly, avoiding long periods of uncertainty that would certainly add stress to an already stressful situation.
- The law also requires parties to bring certain documents to the conference, gives the court an opportunity to require additional documents, and forbids either party from charging the other for legal expenses associated with the conference. Foreclosure defendants may be able to use the conference period to find out information about their case that may otherwise only be obtained through a potentially expensive discovery process.
Foreclosure Attorneys in Nassau County
Of course, foreclosure defendants may appear at the conference with counsel, which may help them take full advantage of the procedure. The Law Firm of Vaughn, Weber & Prakope, PLLC routinely represents clients through all phases of a foreclosure action. If you are facing a foreclosure, and would like to speak with an attorney about a settlement conference, or any other step in the foreclosure process, feel free to call (516) 858-2620 today.
*Contributions to the research and preparation of this blog were made by Jason Mays, J.D. (awaiting admission in NYS).
We are often asked, “should I short sale my property if I already filed bankruptcy?”
There may be several reasons to proceed with either a deed-in-lieu of foreclosure or a short sale of your home after your bankruptcy discharge is granted and your bankruptcy case is closed:
- To avoid paying Homeowner’s insurance.
- To avoid being liable for any injuries sustained on the property.
- To avoid liability for HOA dues.
- To avoid liability for failure to maintain the property.
The above reasons may cause you to lean towards a short sale or deed-in-lieu of your property. However, it would be wise to consult with an attorney before making a final decision.
We proudly assist residents of Long Island: Nassau county, Suffolk county, New York City: Queens, Brooklyn, Bronx, Staten Island, and Manhattan. Call (516) 858-2620 to arrange a FREE consultation with a bankruptcy attorney!
Some of your options:
1. Do something:
-Call your lender and try to arrange a Loan Modification, Refinance, short sale, or Deed-in-Lieu of foreclosure.
-Loan Modification- A Loan Modification is a permanent/temporary change in one or more of the terms of your mortgage loan. Ideally, this will result in a payment you can afford. (You might able to do this yourself).
-Short Sale- A sale of a house for less money than is owed to the lender. Ideally, the lender agrees to accept the proceeds of a short sale and forgives the rest of what is owed. Some lenders are offering a cash incentive to homeowners if they are willing to short sale their home. You will likely need the help of a R.E. Broker & a Real Estate Attorney.
-Deed-in-lieu of Foreclosure- (May only be available after a failed Short Sale attempt). Ideally, the lender accepts ownership of the property in place of the money owed on the mortgage. You will likely need the help of a Real Estate Attorney.
-Consult with an attorney regarding:
-Foreclosure Defenses- Such as a Lack of standing, TILA violations, RESPA violations etc.
-Bankruptcy- Such as Chapter 13- which is a type of “reorganization” used by individuals to pay all or a portion of their debts over a period of years using their current income. The most important thing about a chapter 13 case is that it may allow you to keep your home if you can make the payments which the bankruptcy law requires to be made to your creditors.
-Deficiency Judgments- Generally, a judgment for the amount a homeowner owes the lender after a house is foreclosed upon and sold by the creditor for less than the actual amount still owed.
-Watch this New York State Bar Association video: http://126.96.36.199/peopleslaw/SaveYourHome.htm
2. Do nothing:
-Walk away (OR)
-Stay in your home until you get evicted.
-Pay or go calculator: http://www.payorgo.com/
We believe most people should consider contesting the foreclosure of their home. We were recently successful in getting a foreclosure action stayed. We hope to get it dismissed, or force the lender to do a loan modification.
Mineola Foreclosure Attorneys
Call The Law Firm of Vaughn, Weber & Prakope, PLLC, at 516-858-2620 to speak with a foreclosure defense attorney and/or a bankruptcy lawyer.