Took a commercial mortgage out from a bank in NJ for a property in PA. Settled it 11 years ago by way of a Deed in Lieu of Foreclosure. I live in Florida. Now NJ bank filed a suit against me and my LLC for unpaid money through a NJ Superior court. I provided the Deed for proof. Question is are they filing in the wrong jurisdiction? They filed in NJ, I live in Florida. I also think this debt is time barred, beyond the Statute of Limitations. It is a commercial loan with a personal guarantee. Please help
I suggest you consult an attorney or two licensed to practice in your current state of residence.
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A deed in lieu of foreclosure is a legal agreement where a homeowner/borrower gives the legal title of their home to their lender. In exchange, the lender releases you from your mortgage debt.
While you'll still lose your home as a result of this process, you'll be relieved of your mortgage debt obligations and responsibilities.
Homeowners who decide not to put up a fight to keep their home or to stave off foreclosure can instead pursue a deed in lieu of foreclosure. It is essentially a legal and binding document that transfers the title from the homeowners to the bank that holds the mortgage.
This process means signing over any legal right to your home, and handing over both the deed and the keys to the house. In exchange, the lender agrees to immediately release the borrowers from their mortgage obligations. Lenders tend to be open to this option. After all, when a homeowner comes to a bank and says, "take my house, I know I can't pay," a lender is saving the costs that come with a traditional foreclosure process.
The same goes for the homeowner. "They give the house back to the lender to avoid the hassle of dealing with the legal process and harm it causes to their credit," explains Eric Wilson, director of operations at Better Mortgage, an online direct mortgage lender in New York City.
This approach was especially common in the early 2000s, says John Moran, a home mortgage specialist in Telluride, CO. Banks would often make deed in lieu of foreclosure a more appetizing option by throwing in some cash to sweeten the deal. Often called "cash for keys," the option allows homeowners to leave the home in good condition and provide the deed in return for a cash payment.
Be aware that some mortgage agreements don't allow for a deed in lieu of foreclosure.
"Most loan programs have specific guidelines that determine what options a homeowner can pursue when they go into default," Wilson says.
Take the time to read the legal documents carefully.
You may want to have an attorney assist you with reviewing and understanding the important legal documents. The lender's attorney isn't paid to protect your interests.
You'll definitely want to make sure that the deed in lieu of foreclosure has a provision that expressly states that you'll no longer be responsible for paying the mortgage debt, and the lender has absolutely no right or ability to go after you for a deficiency judgment https://upsolve.org/learn/deficiency-judgment/ .
https://www.realtor.com/advice/finance/deed-lieu-of-foreclosure/
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