New York Real Estate

Deed in Lieu Attorney

 
     
 
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Deed In Lieu of Foreclosure

Deed in Lieu

In today’s real estate market, an alternative to foreclosure or short sale, is to provide the bank with the deed in lieu of foreclosure litigation. Essentially, the property is transferred from the borrower directly to the bank without the expense of litigation and without the borrower finding a purchaser to sell the property in a short sale.


An attorney familiar with short sales, particularly in New York, is essential in obtaining a deed in lieu of foreclosure. This may be done even though the foreclosure process has begun, and even if a short sale was attempted and failed. In our experience as a New York real estate firm with extensive experience in all loss mitigation, providing a deed in lieu of foreclosure to the bank is the easiest and quickest way to resolve the situation.


The banks and financial institutions are reluctant to accept a deed in lieu of foreclosure, and the trend has been for the borrower to first attempt a short sale. After all, the banks do not want to hold property and become a property manager and would prefer to sell the property and maximize their recovery. Due to the sheer number of distressed situations, the banks do not have the money to manage the property while marketing it and eventually sold. In addition, the bank can save the 4-5% real estate fee to sell the property, as well as the closing costs.


In those situations where the bank is not accepting deeds in lieu without first attempting to sell the real estate short, they are more apt to accept an offer in a short sale. It does not benefit the bank to foreclose on the property because as state above, it is costly to maintain the property and then pay a real estate fee and closing costs.


In a foreclosure situation, similarly, the property must be secured. This includes boarding up the windows and winterizing the house by turning off the heat and draining the water pipes. These prevent the house from being evaluated by an engineer and from the borrower obtaining a mortgage because the property cannot be appraised boarded up. Again, a short sale or deed in lieu are more advantageous for all parties than foreclosed property.

 

 

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