Property Ownership
In Florida, a 'deed in lieu of foreclosure' is an arrangement where:
AThe lender forecloses the property in lieu of accepting a deed
BA defaulting borrower voluntarily conveys title to the lender to avoid a formal foreclosure proceeding✓ Correct
CThe buyer receives title through the court rather than a deed
DThe lender agrees to accept a partial payment in lieu of foreclosure
Explanation
A deed in lieu of foreclosure is a voluntary agreement where a borrower in default conveys the property to the lender to satisfy the debt and avoid the time, cost, and credit damage of a formal foreclosure. The lender may or may not forgive any deficiency.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
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