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Roger, Lawyer
Category: Real Estate Law
Satisfied Customers: 31766
Experience:  BV Rated by Martindale-Hubbell; SuperLawyer rating by Thompson-Reuters
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In Missouri are there any repercussions with a deed in leau

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In Missouri are there any repercussions with a deed in leau or foreclosure ie. being sued by the lender?
Hi - my name is XXXXX XXXXX I'm a Real Estate litigation attorney. Thanks for your question.

A deed in lieu of foreclosure is a peaceful return of the property to the lender without the necessity of having to go through foreclosure. The best thing about a deed in lieu of foreclosure is that if the lender accepts the deed, it cannot seek a deficiency judgment against you (you can't be sued by the lender for the balance left after foreclosure).

The reason for this is that the lender agreed to accept the property back instead of having a public sale, and not having a public sale makes it impossible to determine what a deficiency would even be. Thus, the lender is precluded from pursuing you for anything if the deed in lieu is accepted.

Thus, this process is actually the best resolution if you're facing foreclosure.
Roger and 3 other Real Estate Law Specialists are ready to help you
Customer: replied 4 years ago.

Thank you for your answer. Will I have any problems with the IRS with the returning of this property to the lender?

Not if you get this done by the end of the year. The Mortgage Forgiveness Debt Relief Act allows a person to avoid paying taxes on any discharged debt associated with his/her primary residence. However, this act expires on 12/31/12 - - unless the program is extended before the end of the year.

Here's a link to the IRS's website that discusses the law: