| name | deed-in-lieu-of-foreclosure |
| title | Deed in Lieu of Foreclosure Agreement |
| description | Drafts a Deed in Lieu of Foreclosure Agreement for U.S. real estate transactions where a borrower voluntarily conveys property to a lender in full satisfaction of defaulted debt. Use when documenting a deed-in-lieu transaction during default, workout, or settlement phases of a secured real estate loan. |
| author | CaseMark |
| author_url | https://github.com/CaseMark/skills/tree/main/skills/legal/deed-in-lieu-of-foreclosure |
| license | Apache-2.0 |
| version | 0.1.0 |
| execution_mode | open |
| jurisdiction | us |
| practice | real-estate |
| language | en |
| tags | ["agreement","drafting","transactional"] |
Deed in Lieu of Foreclosure Agreement
Drafts a recordable agreement transferring property from borrower to lender in full satisfaction of a defaulted secured debt, as an alternative to formal foreclosure.
Prerequisites
Collect before drafting:
- Loan documents — note, mortgage/deed of trust with recording date, instrument number, recorder's office
- Payoff figures — outstanding principal, accrued interest, fees as of a specific date
- Legal description — verbatim from the recorded mortgage/deed of trust
- Party identification — full legal names matching recorded instruments; entities need jurisdiction, signatory title, resolutions
- Deal terms — deficiency waiver or survival, cash consideration/relocation assistance, credit reporting treatment
- Junior liens — subordinate liens, judgments, or encumbrances requiring payoff or subordination
- State of situs — governs recording requirements, notary form, witness rules, anti-deficiency statutes
Drafting Workflow
1. Caption & Parties
Identify borrower (grantor) and lender (grantee) with full legal name, address, and entity details as on recorded instruments.
2. Recitals
State: original loan date and amount, mortgage/DOT recording info, nature of default, outstanding debt total, lender's foreclosure right, and parties' preference for negotiated resolution. Emphasize voluntary, arms-length nature.
3. Property Conveyance
- Granting clause — borrower grants, conveys, and transfers all right, title, and interest
- Legal description — reproduce verbatim from recorded instrument
- Deed type — warranty deed (most states) or grant deed (CA and others) — confirm per jurisdiction; never default to quitclaim without explicit lender agreement
- Fixtures/personal property — list items transferring with real property
- Delivery condition — vacant, broom-clean by closing date; surrender keys, codes, remotes
4. Consideration & Debt Resolution
- Lender accepts conveyance in full satisfaction and discharge of note and mortgage
- Deficiency — state explicitly whether waived or surviving; research state anti-deficiency statutes (AZ, CA, MN, NC, ND restrict deficiency on purchase-money/residential loans) [VERIFY per state]
- Additional consideration — cash, relocation assistance, credit reporting accommodation with amounts, timing, conditions
