►►►BOOKMARK NOW!◄◄◄
Licensed in Maryland since 1986
serving Buyers and Sellers with a specialty in New
Construction since 2001!
To schedule a Listing
Appointment
or a Tour of Homes, call or
email Cathy at
(301) 514-6839 CELL ♦ (301) 620-9880
OFFICE
DEED IN LIEU OF FORECLOSURE
What is a deed in lieu?
Deed in lieu of foreclosure is a
process in which you give away your property to the lender because
you just can't pay any more. The lender then sells off the
property in order to retrieve a part or whole of the loan balance
you owe.
How does deed in lieu work?
When you go for a deed in
lieu in order to
avoid foreclosure,
you need to sign legal documents such as the Agreement in Lieu of
Foreclosure and a Warranty deed, quit claim deed or a grant deed.
The first document reveals the terms and conditions of the
deed-in-lieu, and is signed by both the lender and borrower. The
second document, which is the deed, conveys legal ownership of the
property to the lender.
The lender marks the borrower's note as "paid" and provides the
latter with two forms - one which states that the debt is canceled
and the other which refers to the waiver of the right to a
deficiency judgment (the lender's right to ask for the unpaid debt
amount if it is not recovered totally by the property-sale).
The agreement for deed in lieu of foreclosure is executed through
an escrow company which receives the borrower's note (marked as
"paid") from the lender. The escrow then records the deed used for
transferring legal ownership of the mortgaged property and sends
the note to the borrower. The borrower is thus released from the
liability of the mortgage payments.
What are the tax consequences?
When you go for deed in lieu, you
may have to pay 2 types of taxes. These are:
Deed tax: Since deed
in lieu foreclosure involves transfer of property, the borrower
needs to pay state deed tax upon conveyance of property to the
lender. The deed tax is $1.65 for no consideration or when
consideration is $500 or less.
The tax is calculated on the difference between the fair market
value of your property and your mortgage balance plus liens
removed from the property due to deed in lieu. It may vary from
one county to another.
Income tax on
canceled debt: As per
Mortgage Debt Forgiveness Tax Relief Act
(applicable till the end of 2009), one need not pay tax on
canceled debt (unpaid loan balance which is forgiven by lender)
resulting from deed in lieu. However, a borrower needs to
satisfy certain
conditions for mortgage tax relief.
Is loan modification better than deed in
lieu?
Mortgage loan modification
is surely a better option than deed in lieu foreclosure because
it helps you keep your home. At the same time, you can save your
credit from taking a big hit. Your loan modification
allows you to negotiate for a lower rate on your mortgage. You may
also get a principal reduction on your loan.
Discover what's GREAT about Frederick, Maryland!
This is an awesome movie you're sure to enjoy!
Click on the icon
below
to search for your next home
OR SCROLL DOWN FOR ALL RECENT LISTINGS
and call me if
you see a home you would like to tour.
I am a Certified New Home Specialist!
I will guide,
counsel, and negotiate on your behalf at no
cost to you!
Simply put, I will serve
as YOUR greatest asset!
If you are in search of a New
Home and need a Buyer Agent to guide,
counsel, negotiate, and protect your best financial interests,
please send me an email with your specific search criteria and
I will work hard to escort you to all communities that will meet
your needs and budget.
When you see a
home you wish to tour, please call me so that I can
escort you on your first visit.
Only THEN
can I protect your interests as
a NEW Home Buyer. I can not assist as your agent once issues arise.
%20-%20Copy.jpg)
