QUESTION: I was having trouble making my mortgage payments and agreed to give the deed back to the lender in lieu of foreclosure. The bank even gave me $3,000 for moving expenses. I moved out three months ago, but I still haven’t received the money, the deed has not been recorded and the foreclosure lawsuit has not been dismissed. Is this OK?
ANSWER: This is pretty typical, but it’s not OK. You are responsible for anything that happens with the property while you are still the owner, including homeowner’s association fees and property taxes. You even will be held liable if someone gets hurt walking across your lawn. It’s important to make sure that your lender promptly records the deed to cut off this liability.
When you give your property back to the lender, you should do a walk-through with your lender’s local real estate agent and have the agent sign that the property was given back in good shape. If this is not possible, make sure that you take dated pictures to document that you left the home in good condition. Make sure to turn off the electricity and water as well.
If the bank’s attorneys have not already done so, you should file a copy of the settlement agreement with the court in case you need to ask a judge to enforce it later. But before going back to court, call your lender and ask about the money, the deed and the foreclosure dismissal. Most of the time, you have to follow up to make sure the deal is completed.
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He is the chairperson of the Real Estate Section of the Broward County Bar Association and is an adjunct professor for the Nova Southeastern University Paralegal Studies program. Send him questions online at http://sunsent.nl/mR20t7 or follow him on Twitter GarySingerLaw.
The information and materials in this column are provided for general informational purposes only and are not intended to be legal advice. No attorney-client relationship is formed. Nothing in this column is intended to substitute for the advice of an attorney, especially an attorney licensed in your jurisdiction.