Deed in Lieu of Foreclosure

Deed in Lieu of Foreclosure

As a Seller, if you sold a property to a Buyer using Seller Finance and the Buyer cannot pay for the property, you may have a couple of options:

• Hire a lawyer to Foreclose your lien on the property
• Accept a Deed in Lieu of Foreclosure

The Buyer must agree to sign the Deed In Lieu of Foreclosure, and the Lender (Seller) must agree to accept the Deed.

Note:  A deed in lieu of foreclosure can be used on seller financed or third party financed liens.

What is Deed in Lieu of Foreclosure

This Deed is a formal legal document used to surrender the property to the Lender or Seller. This deed transfers title of real property from the Buyer back to the Seller in lieu of going through a foreclosure process.

Deed in Lieu of Foreclosure in Texas

The Deed In Lieu of Foreclosure in Texas cancels the Buyer’s obligation to pay for the property by returning the property to the Seller.  However, it does not cancel the lien securing the obligation.

Furthermore, this Deed does not cancel the lien in case the Seller needs to foreclose the lien to remove other liens on the property which may have been filed after the Buyer purchased the property.

Other liens may include the following:

• Federal Tax Liens
• Judgment Liens
• Mechanic’s Lien
• Home Equity Liens.