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Hello. Two friends own a home together. Only 1 person’s name is on the mortgage but they are both on the deed. The friend who has the mortgage moved out. The home is now in foreclosure. The mortgage company is offering the friend a deed in lieu of foreclosure way out. Can the friend do the deed in lieu if there is another name on the deed? If she takes the deed in lieu, will the other friend be evicted from the home even though his name is also on the deed? And if so how quickly can he be evicted? The state is New Jersey. Thanks Everyone!

I know people will suggest a short sale but the 1 owner does not want to agree to this.
The friend doesnt want the deed, he wants to know if the deed in lieu can be done without his agreement. But it sounds like it can’t. He also wants to know if he does agree to the deed in lieu, then how long after that will he have to move out of the house?

3 Thoughts on Can a deed in lieu of foreclosure be done if there are 2 names on the deed but 1 name on the mortgage?
  1. Reply
    February 10, 2014 at 6:25 am

    I think you’re confusing what “deed in lieu” means…what that would mean is both homeowners would give the deed to the mortgage company, in lieu of the mortgage company foreclosing on the home. The friend wouldn’t get the deed, the mortgage company would. And for that to happen, both parties would have to sign the deed over to the mortgage company.

    If the goal is to get the friend on the house solely, a quit claim deed should be all that’s needed, but the friend would need to get a new mortgage to pay off the bad loan, or else it will just be foreclosed on.

  2. Reply
    February 10, 2014 at 6:47 am

    To execute this properly both of you need to go a title company and execute a quit claim deed from the one that is not on the mortgage to the one that is on the mortgage. You will find a title company listed in the yellow pages of your telephone book. While on the telephone find out the charge for this service.

    Then the one with the mortgage can execute the deed-in-lieu of foreclosure.

    You are doing in reverse what you did after the loan closed.

    Who ever is in the house will have to leave once the deed-in-lieu has been accepted by the mortgage lender.

    I hope this has been of some use to you, good luck.

    “FIGHT ON”

  3. Reply
    February 10, 2014 at 7:12 am

    A couple of things.

    1. It is not clear how two people came to be on the deed but only 1 on the loan. It could be the mortgage is superior to the transfer of title that put the second person on the deed. If that is the case their share will get wiped out if the lender forecloses.

    2. The party on the loan can sign the deed over to the lender. They would only be signing over their interest. They can not remove the other person assuming that the second person came on to the title legally.

    3. The lender may not be interested in the deed unless they get clear title. Hence it is very likely that both people on title will need to agree. If they do not agree it can work out that both will lose the property anyway.

    It might make sense for the party that is facing the foreclosure to pay the other party something so they agree to sign the place over. It needs to be made clear that if there is no agreement the foreclosure will wipe out both party’s interest in the property.

    A lawyer should be consulted so it is clear just where everyone stands in terms of the title.

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