If I accept a deed in lieu with my mortgage lender will they be able to collect anymore money from me?

This is a great question. A deed-in-lieu of foreclosure agreement is when the lender agrees not to pursue a foreclosure action against the borrower in exchange for a the borrower signing the deed over to the bank. The obvious benefit for the lender is a speedier return to market for the property and the benefit for the borrower is no foreclosure filing on their credit report, if they are sure to negotiate it.

However, the deed-in lieu doesn’t necessarily extinguish the mortgage note nor does it protect the borrower from deficiency judgements. Of course, your lender is not about to mention these potential problems.

My advice if you are considering accepting such an agreement is to get a real estate attorney to review the agreement. Make sure to get the credit reporting benefit and a guarantee not to pursue any additional legal action or payments and will issue a satifaction of mortgage to insure the mortgage is dead.

Good Luck!