Liable on Note after Deed in Lieu of Foreclosure
Posted by kevin on December 25, 2011 under Foreclosure Blog | 
Comments are off for this article
Last week, the Appellate Division came down with a case that may have some implications for borrowers. There were two defendants which collateralized a business loan with New Jersey real estate. They defaulted on the payment of the loan. The bank sued on the note. If it is not a residential first mortgage, the lender has the option to foreclose, sue on the note or do both at the same time.
Ultimately, the parties settled. The settlement agreement was drafted by the lender and was very involved and in legalese. In essence, the borrowers would give up two properties by deeds in lieu of foreclosure. The lender gave one borrower a release and the other a $4,000 credit. The collateral left a balance due in excess of the $4000. So, the bank sued the one borrower for the difference.
