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30. Is the woman's proposal a viable foreclosure substitute under these facts?
The woman has asked the bank if it would accept a deed to the house and relieve her from any further liability on the loan. The bank is receptive to the woman's proposal.
Five years later, the woman lost her job, had difficulty making her mortgage payments, and defaulted on several payments. The bank notified the woman that it would accelerate the mortgage debt as permitted by the mortgage. The woman tried to sell the house but could not find a buyer. The woman wants to avoid the publicity of a foreclosure sale and protect her credit rating. The house is not encumbered by any other liens.
A woman purchased a house, financing the purchase with a 30-year mortgage granted to a local bank, which the bank promptly recorded.
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A is incorrect. Based on the facts, the purpose of the woman's offer of the deed to the bank is to relieve the woman from further liability on the loan. Since the woman does not wish to redeem the property, the equitable right of redemption does not apply here.
B is incorrect. Whether the property at issue is commercial or residential is irrelevant, since deeds in lieu of foreclosure may be used for both types of properties. There are no other liens against the property and the woman's proposal is voluntary, so the deed is a viable foreclosure substitute.
D is incorrect. A short sale occurs when a lender agrees to release its lien in exchange for the sale proceeds. Here, the woman wants to deed the house back to the bank and not sell it to another party. The transaction between the woman and the bank is therefore not a short sale.