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Ask Dave

Deed In Lieu

If you write out a deed-in-lieu-of-foreclosure, make sure it stipulates "without recourse."

QUESTION: Troy asks about deed-in-lieu-of-foreclosures. What language needs to be in one?

ANSWER: The biggest thing is that it needs to say “without recourse”. A deed-in-lieu-of-foreclosure is a voluntary foreclosure. The mortgage company will take the house, sell it and sue you for the difference later. By having “without recourse” in there, it helps to keep you from being sued later from any money that the house does not bring back to you.