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whether a Deed in Lieu of Foreclosure can be transferred with a Mortgage Assignment

Discussion in 'Other Ownership, Use & Privacy Issues' started by Angus Gaffney, Jun 22, 2021.

  1. Angus Gaffney

    Angus Gaffney Law Topic Starter New Member

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    Jurisdiction:
    Pennsylvania
    The original lender/mortgagor obtained a Deed in Lieu of Foreclosure from the borrower. When the mortgage was assigned to me by the original lender, the Deed in Lieu of Foreclosure was not assigned.
     
  2. justblue

    justblue Well-Known Member

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    Okay. What is your question?
     
  3. Angus Gaffney

    Angus Gaffney Law Topic Starter New Member

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    Sorry I wasn't clear, my question is as follows:
    Can a Deed in Lieu of Foreclosure be transferred with a Mortgage Assignment?
     
  4. army judge

    army judge Super Moderator

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    The answer depends on just how sophisticated and savvy a prospective buyer (maybe the seller) is and if she/he/it has sought the services of a "real estate attorney".


    To clarify for those who might not know what a "DILF" means:
    A deed in lieu of foreclosure (deed in lieu) is when a bank agrees to accept a deed to the property instead of foreclosing to obtain legal title to the property in question.

    Pennsylvania law is silent regarding whether a bank can get a deficiency judgment regarding this type of real property transaction.

    Is there is a disadvantage for any lender accepting a "deed in lieu of foreclosure"?
    The purchaser is required to pay off the mortgage and any secondary liens after the sale.
     
  5. zddoodah

    zddoodah Well-Known Member

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    Deeds don't get transferred or assigned. Title gets transferred. If the prior owner/borrower gave a deed in lieu of foreclosure to the mortgagee, then the mortgagee became the owner. Subject to the specifics of the deed in lieu, that may have effectively extinguished the mortgage, which might make the assignment of the mortgage a nullity.

    It would be helpful if you provided a timeline:

    mm/yyyy - mortgage executed.
    mm/yyyy - owner gives mortgagee a deed in lieu
    mm/yyyy - deed in lieu filed/recorded with county clerk/recorder
    mm/yyyy - mortgagee assigns mortgage to you

    Please also include any other relevant events in the timeline and also answer the following questions:

    1. For what reason did the mortgagee assign the mortgage to you?
    2. Did you give consideration for the assignment? If so, what was the consideration?
    3. At any time, were you represented by an attorney in connection with this?
    4. Who drafted the assignment of the mortgage?
     
    Angus Gaffney likes this.

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