Question: Do I need a Lawyer to file a Lieu of deed with the bank that I'm going through a foreclosure on a 4 family apartment? It was included when I filed bankruptcy in March of 2010.
Response: No. There is nothing to file with the bank since the mortgage was part of your bankruptcy. Your obligation on the Note has been discharged. This is the reason why a deed-in-lieu of foreclosure would be negotiated with the bank. There is nothing to negotiate at this time. Also, you do not “file” a deed-in-lieu with the bank. The bank has to agree to deed-in-lieu before the deed can be reconveyed to the lender. The bank has been given notice of the surrender of the property in your bankruptcy case. It is now up to the bank to take action to take the property.
Question: I was informed from another attorney a while back to do the deed in lieu but your saying not to bother with it because the bank already knows my intentions to foreclose and give up the property? Response 1: You cannot just do a deed-in-lieu without the consent of the bank. The bank must agree to a deed-in-lieu in before a deed is reconveyed to the bank. You do deed-in-lieu because you can no longer afford the property and you want to reconvey the property to the bank for full satisfaction of the mortgage. If the mortgage has already been discharged in bankruptcy, the deed-in-lieu is pointless. Yes, that's what I am saying. The bank already knows your intentions by your surrender of the property in bankruptcy. Once they take the property, will they ask for the keys to the property or will they just do a forced entry? Response 2: No, they do not. They have locksmiths that get into the property.
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