Giving The House Back

Hi Paul,

Can I give the house back and not lender come after me for judgements issue. House is Florida and no longer live there.

Kim

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Hi Kim,

That would be a deed in lieu of foreclosure and if that is the foreclosure avoidance strategy selected then that should be negotiated with the lender.  Simply deeding the property to the lender does not guarantee that the lender will provide a full release to the borrower or even that they will accept the deed.

Deficiency judgments are pursued by lenders in Florida – it’s case by case.  For example, here is an example of a deficiency judgment in Pinellas County Florida.  The lender can either make a motion for deficiency within one-year of the foreclosure sale without having the borrower served again – or bring a separate action for the deficiency after one year.

The deed-in-lieu is treated by lenders as a foreclosure for mortgage underwriting purposes.  I’ll add that another option that is superior to the deed-in-lieu is a short sale.  A successful short sale with full release of liability is preferred to a deed-in-lieu because it can settle the debt with a zero balance and is generally not viewed as a foreclosure by originating lenders.

Thanks for the questions and hope this helps.

Paul

This author is not an attorney and this information should not be considered legal advice.  Please consult an attorney for legal advice.