I have a home in Florida with several construction defects. We have received a rather insufficient insurance settlement from the contractors’ policy. We are planning to use that money to set up a new primary residence in Arizona. Can we then offer a Deed In Lieu Foreclosure?
October 28th, 2009 by Jarad S.
Question: I have a home in Florida with sever construction defects.
The house cannot be sold and does not have any real value (actually a negative value).
We have received a rather insufficient insurance settlement from the contractors’ policy.
Since the settlement was not enough to cover the existing mortgage and provide provide a new place to live we are planning to use that money to set up a new primary residence in Arizona Can we then offer a Deed in Lieu Foreclosure? Can they take our Arizona home.
PS: There is no record with the county or is there anything from the insurance company defining how we use the money.
Answer: -First lets address the whole insurance thing. As with any insurance policy or insurance claim, it’s there to be used to fix or rebuild whatever was insured. So that’ s up to you how you want to handle that. In terms of offering your lender a deed in lieu of foreclosure is definitely a possibility as long as there are no other liens or mortgages on the property. As for your Arizona home, if you didn’t pledge it as collaterial for the Florida home, then no…they can’t take it. The worst they can do is sue you and file a judgment against you for the amount they lost. Very rarely happens, but it can happen.
