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TJ, Esq.
TJ, Esq., Attorney
Category: Real Estate Law
Satisfied Customers: 12206
Experience:  JD, MBA
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My brother signed a Deed in Lieu of Foreclosure and the bank

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My brother signed a Deed in Lieu of Foreclosure and the bank has acted on it. I have an investment in his home as I covered several of his Mortgage payments. Can I put any kind of lien on any profit they may make, or was all equity signed away with the Deed in Lieu of Foreclosure?
Hello and thank you for allowing me the opportunity to assist you.

Unfortunately, you cannot put a lien on the house (or any profit) after the fact. If you already have a lien, then it is still valid since there was no foreclosure to wipe it out. But if you have no lien on the house, then you have no interest in the house. You may have recourse against your brother, however, if he agreed to repay you. In that scenario, you would need to take legal action against him, not the lender that took the deed.

I am truly sorry to give you this bad news, but please understand that it would be unfair to you (and unprofessional of me) to provide you with anything less than an honest response. However, if your concerns were not satisfactorily addressed, then please let me know, and I will be happy to clarify my answer. I do ask that you rate me based upon whether I answered your question, and not based upon whether the answer was good news or bad news. Your positive feedback is greatly appreciated. Thank you for using our service!

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Customer: replied 4 years ago.

You state "If you already have a lien..." but what constitutes a lien. Is a gentleman's agreement enough? I have dates and amounts. I know the UCC Security Agreement does not apply here but it was altered to not need a written signature. Do my records constitute any form of proof of validity of lien?

Hi again.

Q: but what constitutes a lien. Is a gentleman's agreement enough?

A: Unfortunately, no. I mean an actual security interest recorded in the county's land records office. If no lien was recorded, then the lender took the property from your brother free and clear. If the lien was recorded, then I suspect the lender would not have accepted a deed in lieu. Instead, it would have foreclosed, which would have wiped out your lien. In this case, with no recorded lien, the lender took the property with a clear title. I'm sorry to say that you recourse is against your brother, not the lender/property.
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