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Ask Barrister Your Own Question
Barrister
Barrister, Lawyer
Category: Real Estate Law
Satisfied Customers: 36195
Experience:  16 years real estate, Realtor. Landlord 26 years
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Hi Matt. You have helped me with your expertise in the past.

Customer Question

Hi Matt. You have helped me with your expertise in the past. I would like to ask you a similar question today: I have a model home in SC (as you know not a non-recourse state). The builder has cancelled the lease and I have been trying to sell the home without any luck. Looks like Bank of America will accept a deed in lieu of foreclosure, however, the document they are asking me to sign to get my consent to start the DIL application mentions that they have the right to pursue me for the deficiency if the home is an investment property or second home (it's an investment property). Should I sign or not sign that document? Or should I try signing it and crossing out that one sentence (to make clear that I won't afford paying the difference)? Or should I try to claim the house as primary residence? Since I don't have an official U.S..job I could pretty much live anywhere (I'm actually not even in the U.S. anymore - I'm not a U.S. citizen - but I've officially kept a U.S. address in California). I actually just got a call from the company that BoA works with and asked about those lines in the document and said that it used to be an investment property but that I have used it as my primary home for a few months and am now keeping it vacant because I was trying to sell it, aehem. The lady said that this wasn't the final DIL and they wouldn't pursue me for the deficiency, given that it's not an investment property, but that I could ask the asset manager once I view the final DIL agreement before signing . . . Thanks for your help. Tim (PS: I could send the doc if it helps)
Submitted: 6 years ago.
Category: Real Estate Law
Expert:  Barrister replied 6 years ago.

Barrister :

Well, I don't belive I would sign the document as it doesn't put you in any better position than if they foreclosed except maybe creditwise. If they can still sue you for any deficiency, then it is not a true DIL transaction as a DIL typically just cancels the mortgage and note and the bank just gets the house back.

Barrister :

I would definitely cross out the statement, initial it, and then send it back to see if they would agree to go through with it.

Barrister :

In order to claim NC as your domicile for residency requirements, you typically have to live there a year and intend to make NC your home permanently. So if you claim it and they dispute it and show that you only did it for the exemption, then they could claim fraud on a creditor and reinstate the deficiency balance.

Barrister :

So the long and short of it is that it is unlikely that they would pursue you for the deficiency as they would have to go to the time and trouble to prove it was a second or investment home. But I wouldn't want to risk it without trying first to mark out the clause and see if they would agree. I would feign ignorance if they questioned it and explain that you thought that meant that you would automatically have to pay any deficiency.

Barrister :

thanks

Barrister :

Barrister

Barrister :

aka Matt

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