Deed in Lieu of Foreclosure
Forty-four of the 50 States allow the lender to receive a Deficiency Judgment against the borrower for any loss they suffer from the results of funding a loan on their home.
The 6 States that do not allow deficiency judgments are: California, Minnesota, Mississippi, Montana, North Dakota and West Virginia.
Under some conditions lenders will accept the property back from the borrower as full payment in order to save the time and expense of going through the foreclosure process.
Our job is to convince the lender it's in their best interest to accept the property as payment in full.
This is not a simple plan as we must provide the lender with a complex detailed analysis of current value of the property --and future value. Then we must prove that the borrower cannot afford to make payment or sell the home any time soon or at all.
Note a deed in lieu will also prevent the lender from filing a 1099 on their loss which is regular income to the borrower.