Deeds in Lieu of Foreclosure
This legal case study looks at a situation in which a contractor ended up taking over the second mortgage on an office complex he'd done work on. After the owner of the office complex paid him late a few times, he offered to turn over the property to the contractor to fully satisfy the mortgage. This case and its analysis examines the concepts of judicial vs. non-judicial foreclosure, and what is involved in each, including an overview of what procedures are required in each process.
- How long a non-judicial foreclosure usually takes
- Why a deed in lieu of foreclosure is an attractive alternative
- How you (as creditor) should proceed if the property is worth less than the mortgage
- Why courts sometimes frown on these transactions
- The importance of independent appraisals in the process
- Steps to take to protect against future preference claims
- How when the same person owns a mortgage and the property, the mortgage merges into the title and why this can present a strategic disadvantage to the lender... What steps you should take to protect yourself.
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