Forced Deed In Lieu
Forced Deed in Lieu (FDIL) is a term born out of the originative protagonism of various homeowners considering filing for bankruptcy after facing a hard time on the financial front. There is nothing seemingly “Forced” in the entire process. However, it is called FDIL for other reasons.
Firstly, FDIL is consensual, not a process which negotiated through mandatory cycles of Foreclosure like a 90 day listing, letter of hardship, lack of financial aid etc. The homeowner, instead, works with the litigator, to draw a “Special Warranty” DIL (Deed in Lieu) signed in front of two individual witnesses. This deed is notarized and recorded in the county court where the property in question is located.
The original of the FDIL is then dispatched to the Lender with a clear explanation stating the benefits of the deed and how the deed encompasses the interest of both the parties; Lender and the Borrower.
Secondly, this deed results in a smooth legal Transfer of Ownership of the property in question, where the benefit received is immediate. The other important feature of FDIL is that the borrower is exempt from a total Asset Analysis. Instead, a Pre-Bankruptcy Analysis suffices for the process. These results in overall savings in terms of the costs involved as well as time invested in the process, for both parties. Forced Deed in Lieu is result oriented from the point of effectiveness and Cost/Benefit ratio.
Usually, the Deed in Lieu is a transaction based on mutual consent of both the Lender and the Borrower. Unless it is agreed on by the Lender especially, it cannot be carried forth. Considering the rate of success of the DIL and the challenges involved in the process, it is important that homeowners understand the concept of “Forced Deed in Lieu of Foreclosure” and other alternative options which they can exercise to their benefit.
|
 |
