Default borrower has offered to quit claim deed back

[Don Harris]

I have two notes in default. I've done multiple transactions with both borrowers. One is in a judicial state and the the other is in a non judicial state. 

In both cases the borrowers have offered to Quit Claim deed the properties back to me. I'm on amicable  terms with both borrowers. An attorney has recommended I foreclose. 

What has been your experience as a lender?

[Jay Hinrichs]

Don,,, be sure to check with title company or title insurers in those states.. a QC deed may not be insurable going forward.. what you want is to open escrow and do a deed in Lui of foreclosure that the title company will insure.

In some states QC are fine.. but I seem to recall for instance in MO they are not.. I had one of my investor who got hooked up with a shyster in KC and that guy just QC the property back to him but the title company would not insure it.. so he had to then go full blown foreclosure route to clean the title up.. when he could have done a deed in Lui.. but he was a novice and did not really understand until I helped him through it.

So any-who foreclosure route is fool proof.. Deed in lui as long as you get it insured is better and faster and far CHEAPER... if you have willing borrowers they should have no issue giving you a Deed in Lui instead of a QC deed... 

Also for your piece of mind get on the horn with a local title company and have them do a quick date down for you.. IE lien search and make sure for now their are no mechanics liens, IRS leins etc etc.

most defaulted borrowers as your probably aware have not paid property tax's so you can pay those so the default interest does not keep ticking away..