Loan Modification Programs In Minnesota: deed In Lieu

The world is in the grip of a serious economic crisis and the USA is deeply involved too

. Minnesota is probably one of the worst off states as far as slow growth in employment opportunities and improvement in income goes. However the percapita housing ownership is the highest in the country, strange as it must seem.

Many people are hanging on to their homes, but they are having a hard time doing it. A great many more are facing serious difficulties, having to sell their houses and even facing foreclosure.

If you have succumbed to the economic difficulties besetting Minnesota at the moment, you may have resigned yourself to the fact that you are going to lose your house. Perhaps you have put it on the market for an amount that will free you up from your debt and your mortgage loan, but so far have not managed to sell. What is the next step? Time is passing and you are defaulting on your mortgage payments. Is foreclosure the only answer?

A Deed in Lieu of Foreclosure is a way to prevent foreclosure on your home that you might consider. This is less harmful to your credit report than either foreclosure or bankruptcy. You also avoid the public humiliation that is inevitably part of these options. But the biggest advantage is that you are immediately released from the backlog of indebtedness to your mortgage home loan lender.

The ownership of the property is handed over to the lender or bank and the property becomes theirs.

The advantage to the lender is that the expenses inevitable in repossession and foreclosure are avoided. Of course the fair value of the property at the present time has to match or exceed the outstanding amount of the mortgage home loan, or else the lender stands to lose big time. It obviously makes sense that the outstanding amount is not too much less than the value of the property, or else the borrower [present owner of the house] in his turn stands to lose big time, too. It should be a win- win situation and in balance for both parties. The agreement must be entered into voluntarily and in good faith. Indeed an absolutely vital ingredient in this process is co-operation. This is a mutual agreement entered into between the bank / lender and the borrower.

You, the borrower may be required to sign documentation that you entered freely into this agreement without pressure from the lender. When transfer of ownership is involved, Minnesota courts tend to scrutinise these deals to make sure no pressure was brought to bear, especially if inexperienced or elderly persons are involved.

There are legal implications in this for both lender [for example the two year right of rescission] and for the borrower [for example surrendering your redemption or reinstatement rights] and you ought to get sound legal advice before you enter into this deal.

by: Lance Peters

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