Deed In Lieu V. Short Sale
what are the pros and cons of these 2 approches?
As I understand it, in CA if you do a deed in lieu... you give the deed to the lender and walk (other than debt forgiveness). But, what happens to a 2nd? is it wiped.
Sample w/ short... does the seller have to negotiate w/ 1st and 2nd to accept my offer?
Do thes transactions provide (as) "clear title" as a trustees deed would?
thanks all.
without a foreclosure the act of conveyance alone (transferring the deed) does not wipe junior encumbrances. If the first mortgagee takes back the deed in lieu (someone please correct me if I'm wrong here) I believe the first mortgage merges with its ownership such that the 2nd mortgage moves into the first. This is because the first mortgagee is no longer simply a lender but rather becomes the owner (and you can't owe yourself money). Hence I think the only debt which would remain would be that of the 2nd which now moves to first.
Thanks... that sounds how it was described.... I think the phrase that was used was "subject to" other encumbrances.
thats correct, at that point you would be taking the deed subject to the existing 2nd mortgage and any other encumbrances on the property.