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Deed
in Lieu of Foreclosure
A deed in lieu of foreclosure deeds the property
back to the lender. In return, the lender will forgive
the outstanding mortgage and any arrears owed. This
process cancels the impending foreclosure. In order
for a lender to accept the deed, many will provide that
the borrower already tried to sell the property. Also,
the lender should agree to provide a reasonable amount
of time for the borrower to find alternative housing.
A deed in lieu of foreclosure will not work if there
are any other junior liens held on the property. This
option will still negatively affect the borrower’s
credit score almost as badly as a foreclosure, but it
may make it easier to obtain new credit.
The deed in lieu of foreclosure offers several advantages
to both the borrower and the lender. The principal advantage
to the borrower is that it immediately releases him/her
from most or all of the personal indebtedness associated
with the defaulted loan. The borrower also avoids the
public notoriety of a foreclosure proceeding and may
receive more generous terms than he/she would in a formal
foreclosure
There are other legal issues surrounding this type of
alternative that should always be first discussed with
an attorney
Personal
Representative Deeds
Deed conveying the seller's interest in real
property to the personal representative who manages
the financial affairs of another person who is unable
to do so either by health or age.
Quitclaim
Deed
Quitclaim deeds transfer or "quit" any interest
in real property. The grantor may not be in title at
all, so the grantee cannot assume that the grantor has
any real interest to convey. However, if the grantor
were, say, married to the owner of the property, signing
and recording a quitclaim deed in favor of the spouse
would transfer any interest the grantor may have in
the property to the spouse.
Special
Warranty Deed
A written instrument that conveys real property in which
the grantor (original owner) only covenants to warrant
and defend the title against claims and demands by him
or her and all persons claiming by, through, and under
him or her.
In the special warranty deed, the grantor warrants that
neither he nor anyone claim- ing under him has encumbered
the property and that he will defend the title against
de- fects arising under and through him, but no others.
Tax
Deed Sale
A tax deed sale is the forced sale, conducted by a governmental
agency, of real estate for nonpayment of taxes. It is
one of two methodologies used by governmental agencies
to collect delinquent taxes owed on real estate, the
other being the tax lien sale.
Trustee
Deed
Legal document used in some states in lieu of a Mortgage.
Title to the property passes from seller to a trustee,
who holds the mortgaged property until the mortgage
has been fully paid. The trustee is authorized to sell
the property if the borrower defaults, paying the lender
the amount of the mortgage loan and any remaining balance
to the former owner.
Warranty
Deed
Deed conveying the seller's interest in real property
to the buyer. The seller, also known as the grantor,
certifies that the title on property being conveyed
is free and clear of defects, liens, and encumbrances.
If a third party claim is not exempted specifically,
the buyer (the grantee) may sue the seller for the damages
caused by the defective title.
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