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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Explaining the deed-in-lieu of foreclosure... Posted by Ward-CA- on June 08, 2003 at 9:18 AM In Reply to: Re: Concurrent Escrow and Deed-in -Lieu posted by David on June 05, 2003 at 1:22 PM : Ward, : I'm in a similar situation and was wondering: : 1) What is the difference between a Grant Deed and a deed-in-lieu? I always thought they were EXACTLY the same documents, the only difference being that when the grantee is also the note holder it is referred to as a deed-in-lieu. : 2) As the note holder, can I give cash to the homeowner? : 3) Do I need a purchase agreement with a 5 day right of recession (I’m in CA), enough cash to the homeowner to avoid unconscionable advantage, affidavit of deed signature and all that stuff? : 4) If I do my own title search and am comfortable do I need title insurance for any reason? : 5) What is this Estoppel estopping, I can't see its purpose? : Thanks, : David =•=•=•=•=•=•=•=•=•=•= David, (1). A deed-in-lieu of foreclosure is executed by the trustor to the beneficiary to avoid having the beneficiary foreclose on its deed of trust, whereas the purpose of a grant deed is to display ownership of real property or transfer the title of real property from the present owner to some other party. The benefit to the lender to accept a deed-in-lieu of foreclosure is that they can avoid the time and money it takes to foreclose against their borrower. The lender receives title to the secured property immediately with very little transaction cost. The benefit to the borrower is that they can avoid the embarrassment and negative credit rating concomitant with a public foreclosure auction of their property. (2). You can give the trustor cash in the deed-in-lieu transaction. (3). Deed-in-lieu transactions are exempt from the constraints of CC §§ 1695-1695.14 so you won’t have to deal with the Equity Purchase Agreement, etc. (4). No, you don’t need any title insurance if you feel you have the skills necessary to research the title record of the property down at the recorder’s office. (5). Title insurers customarily require an estoppel affidavit from the trustor stating that the conveyance was freely and fairly made and that the consideration is equal to the fair value of the trustor’s equity. This is to prevent the trustor from recanting and challenging the validity of the lieu deed some time later. Hope this helps. Follow Ups: Re: Explaining the deed-in-lieu of foreclosure... Joe 10:01 AM, 07/26/03 (0) Post a Followup: Name : E-Mail : Subject : Comments: : : Ward, : : I'm in a similar situation and was wondering: : : 1) What is the difference between a Grant Deed and a deed-in-lieu? I always thought they were EXACTLY the same documents, the only difference being that when the grantee is also the note holder it is referred to as a deed-in-lieu. : : 2) As the note holder, can I give cash to the homeowner? : : 3) Do I need a purchase agreement with a 5 day right of recession (I’m in CA), enough cash to the homeowner to avoid unconscionable advantage, affidavit of deed signature and all that stuff? : : 4) If I do my own title search and am comfortable do I need title insurance for any reason? : : 5) What is this Estoppel estopping, I can't see its purpose? : : Thanks, : : David : =•=•=•=•=•=•=•=•=•=•= : David, : (1). A deed-in-lieu of foreclosure is executed by the trustor to the beneficiary to avoid having the beneficiary foreclose on its deed of trust, whereas the purpose of a grant deed is to display ownership of real property or transfer the title of real property from the present owner to some other party. : The benefit to the lender to accept a deed-in-lieu of foreclosure is that they can avoid the time and money it takes to foreclose against their borrower. The lender receives title to the secured property immediately with very little transaction cost. : The benefit to the borrower is that they can avoid the embarrassment and negative credit rating concomitant with a public foreclosure auction of their property. : (2). You can give the trustor cash in the deed-in-lieu transaction. : (3). Deed-in-lieu transactions are exempt from the constraints of CC §§ 1695-1695.14 so you won’t have to deal with the Equity Purchase Agreement, etc. : (4). No, you don’t need any title insurance if you feel you have the skills necessary to research the title record of the property down at the recorder’s office. : (5). Title insurers customarily require an estoppel affidavit from the trustor stating that the conveyance was freely and fairly made and that the consideration is equal to the fair value of the trustor’s equity. This is to prevent the trustor from recanting and challenging the validity of the lieu deed some time later. : : Hope this helps. Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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