Welcome to the Kazi Law Firm! We are a boutique law firm steeped in Texas tradition personifying the warmth and congeniality consistent with southern hospitality. We believe in preserving integrity and professionalism with true Texan charm, staying true to our roots, while providing essential, affordable legal services to all. Located just north of Dallas, Texas in the rapidly growing suburb of Frisco; the Kazi Law Firm concentrates on contracts drafting and review, immigration law, will & estates, real estate law, landlord, tenant, mediation, and general business law needs.
Given the current pandemic sweeping the nation, some companies have downsized and laid off employees. The uncertainty in the economy leading up to a Presidential election, the looming threat of a shutdown in some states, and the overall defeated morale of people everywhere has brought about economic strife for some homeowners. Unfortunately, several homeowners are faced with challenging financial choices, especially if they have lost a job and are living off dwindling savings. A deed in lieu of foreclosure could be one of the solutions a homeowner turns to in times of extended financial hardship.
What is a deed in lieu of foreclosure?
A deed in lieu of foreclosure is a legal process in which the title of a home is transferred from the homeowner to their mortgage lender. In doing so, the homeowner is no longer obligated to repay the mortgage, and they are released from their mortgage debt. In other words, the deed in lieu is the legal document that the homeowner signs to make the transfer complete. Once the deed in lieu is complete, the lender will attempt to sell the home to pay off the remaining debt.
Deed in lieu of foreclosure vs. foreclosure:
There are numerous distinctions between a deed in lieu of foreclosure and a foreclosure. Primarily, a deed in lieu is a mutual agreement between a homeowner and their lender. On the contrary, in a foreclosure proceeding, the lender involuntarily takes back the property after an extended period of nonpayment by the homeowner.
A deed in lieu of foreclosure is generally the last resort for a homeowner to avoid foreclosure. In a foreclosure, the bank could sue the homeowner for any amount they were unable to recoup if the house sells for less than what is owed on the mortgage.
Also, keep in mind that a deed in lieu of foreclosure can help you avoid costly litigation as it is normally a much quieter transaction than a foreclosure. Foreclosures tend to be embarrassing and upsetting for homeowners. It is also possible that the homeowner’s credit will be less impacted by a deed in lieu of foreclosure, compared to a full foreclosure.
While homeowners will likely have to wait three to five years to purchase another home after a deed in lieu of foreclosure, they face an even lengthier impact with a foreclosure, and could have to wait as long as 10 years.
Deed in lieu of foreclosure vs. short sale:
A short sale is another option for a homeowner facing a challenging financial situation and struggling to make their mortgage payments. Similar to a deed in lieu of foreclosure, in a short sale, the homeowner and their lender come to an agreement. However, in this case, the agreement is for the home to be sold for less than the balance due on the mortgage. Essentially, once the home is sold, the lender forgives the remaining balance of the loan. Keep in mind that a deed in lieu of foreclosure is different than a short sale because it transfers the property to the lender instead of selling it to a new buyer.
I built my law practice on the premise of being a life raft in a sea of sharks. I want to be an advocate for those that have been wronged and are too intimidated to seek help. My firm is here to explore your options, guide you through your legal journey, and give you that safe space to ask questions! There’s no such thing as a stupid question…Only the ones you don’t ask. So, my question to my clients is not “do you have any questions?” But rather “what questions do you have?”
As always, the Kazi Law Firm is standing by to help you in your time of need. Don’t hesitate to contact us today. We specialize in real estate law, landlord-tenant disputes, immigration, and wills & estate planning. Family is at the core of our practice. Just as we treat our family with respect and understanding, we treat yours. Come join the Kazi Law Firm family today!
Why swim alone in shark-infested waters when you don’t need to?