Alabama Foreclosure — What is a Deed in Lieu of Foreclosure?
Alabama Foreclosure — What is a Deed in Lieu of Foreclosure?
A deed in lieu of a foreclosure is one technique to avoid a foreclosure (non judicial foreclosure in Alabama.)
It is where you give the deed back to the mortgage company instead of (in “lieu of”) the mortgage company foreclosing on you.
Be careful about what the settlement language really says between the mortgage company and yourself.
Especially if you’re interested in this approach.
For example:
- Will you owe any type of deficiency for the difference between the value of the property and the greater amount that you owe?
- What will your credit reporting show. A foreclosure or will it be deleted or what will happen?
- Will you be issued a 1099 for taxes by the mortgage company for any type of “debt forgiveness” because of the deed in lieu?
There are other issues to look at but these are some of the more common.
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You can reach us at 205-879-2447 and our paralegal Randi will be glad to better understand your situation.
She will be glad to set up a meeting with us.
Or you can fill out this contact form and we will get in touch with you as soon as possible.
Thanks for reading, and have a great day!
How long will it take to do deed in lieu and how much it usually costs? The property is in Alabama. Thanks!
Andy,
Not an easy way to give you specifics. Each situation is different especially with different mortgage companies.
Here’s a typical pattern:
1. Fall behind
2. Ask for loss mitigation
3. Be considered for loan modification
4. Get turned down
5. Try and sale the house for at least what it is owed
6. That fails
7. Try and do a short sale (selling for less than what is owed)
8. That fails
9. Considered for deed in lieu of foreclosure
As far as price, again it varies. Some companies want you to pay any deficiency after the house is sold — others don’t.
Give us a call if you want — 205-879-2447 and ask for Randi and we can chat about it.
Thanks!
John Watts
Can a trustee execute a deed in lieu of foreclosure and avoid deficiencies if the decedent had no equity or other assets other than household goods?
Deborah,
The mortgage company (at least dealing with Alabama homes) can always do a deed in lieu where there is NO deficiency. Some won’t so you have to press them on this if it is important to you.
It may help to show that there is no money or income or assets.
Hope that helps!
John Watts