Proceed With CautionPDF
David J. Williams' article, "Proceed with Caution," was published in the April 2015 issue of Mortgage Banking Magazine.
From the article...
"In the current real estate and financing cycle, lenders across the country often issue notices of non-acceptance when faced with borrowers’ attempts to hand over title to property in deeds in lieu of foreclosure.
A deed in lieu has historically been thought by lenders to increase the risk of affecting their ability to “wipe out” junior lien holders through the normal process of foreclosure. This remains true for most states where, whether known or unknown, the general rule is that a deed in lieu does not always wipe out any subordinate liens. "