Irvine Deed in Lieu Attorney Realtor
Helping California Homeowners Exit Mortgages Without Liability
No one wants to deal with foreclosures or evictions – not even the banks. The reality is that going through foreclosure process is costly and time-consuming. This is a large part of why mortgage servicers are willing to explore foreclosure alternatives.
In some cases, a semi-permanent change in circumstances can result in a homeowner knowing with some certainty that they will no longer be able to keep up with their monthly mortgage payments. Perhaps a severe reduction in income or an irreversible increase in living expenses has made your current mortgage unaffordable. While there are options to help you negotiate a loan modification, you may simply want to exit your current situation and find new living arrangements.
A deed in lieu of foreclosure involves the homeowner directly and voluntarily transferring ownership of the property to the principal lender to avoid the costs and other inconveniences of the foreclosure and eviction process. However, accepting a deed in lieu of foreclosure can expose the lender to certain liabilities that they are unwilling to accept.
Our Irvine deed-in-lieu Attorney/Realtor can help you understand why this option is rarely successful and help explore alternatives that can assist you in safely and effectively selling your home. Our team at Lawyers Realty Group has supported thousands of California homeowners across Los Angeles, San Diego, and Orange counties and benefit from over 50 years of experience.
Why a Deeds-in-Lieu Is Uncommon In California
A deed in lieu of foreclosure is generally advantageous to the homeowner but disadvantageous to the lender. Though both parties get to avoid foreclosure, the lender can be left with significant liabilities. When a mortgage servicer accepts the deed and ownership of a home, they also accept all of the liens, judgments, and other encumbrances currently assigned to the property. By assuming ownership, they also assume responsibility for these debts.
This means that accepting a deed in lieu of foreclosure also requires accepting any judgment liens, support liens, and tax liens currently encumbering the property. Predictably, most mortgage servicers will not accept this arrangement. They will generally require that all liens and junior encumbrances be settled before a transfer will even be considered.
The result is that very few deeds in lieu of foreclosure are accepted in California. Mortgage servicers will almost always require that you explore other foreclosure alternatives first.
Alternative to Deeds in Lieu
Fortunately, there are other means of safely exiting your mortgage agreement if you cannot keep up with your payments. Most mortgage servicers will be more amenable to the prospect of a short sale versus a deed in lieu of foreclosure.
A short sale involves selling a property for an amount that is less than your outstanding mortgage balance. To be eligible for a short sale, your mortgage balance must exceed the current value of the home, and you will also need some form of documented hardship that establishes why you cannot continue to pay.
Crucially, a successful short sale will release you from all liens and encumbrances associated with the property. This helps you avoid deficiency judgments and keeps your mortgage servicer from assuming liability for any liens that they might take in a deed in lieu of foreclosure.
If you are facing an imminent foreclosure of your home, but need time to find new living arrangements, you might benefit from our free bankruptcy services. This combination strategy involves filing for Chapter 7 bankruptcy in advance of a short sale, allowing you to eliminate some forms of debt and giving you the ability to remain in your home for over a year in most cases.
Our Irvine deed-in-lieu Attorney/Realtor at Lawyers Realty Group can give you the sophisticated and skilled guidance you need when planning an exit from your California home. Our firm is an attorney-owned and operated real estate brokerage that can help you level the playing field with an uncooperative mortgage servicer. We are familiar with a wide range of foreclosure alternatives and can assist you in negotiating with your lender.