Legal Question in Real Estate Law in Illinois

We completed a deed in lieu with the bank. Now our house is listed for sale under foreclosures. Can they do that? The whole point of deed in lieu was to avoid showing a foreclosure. I feel I'm being defamed.

Asked on 8/27/19, 7:27 pm

1 Answer from Attorneys

Well, was a foreclosure lawsuit filed? I'll assume yes. A deed in lieu doesn't necessarily extinguish your debt until the property is sold depending on how it's worded. Also a deed in lieu doesn't necessarily stop the lender from getting a judgment in foreclosure depending on how it's worded. Why? Because various requirements of income tax and other law that the lender has to deal with make it so, and you may receive a 1099 ultimately that you may have to deal with once the debt is satisfied out of the sale assuming it is sold for less than you owed; they may need the actual judgment in foreclosure. This is not atypical. But if you did not have an attorney review the deed in lieu agreement and the deed that you gave, it may be time to do that.

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Answered on 8/28/19, 11:55 am

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