Note for sale saying 'Borrower signed A Deed In Lieu'
Forgive my n00b question, still learning the note business. I'm seeing some 1st notes for sale where the seller says 'Borrow signed A Deed In Lieu'. What exactly does that mean for the note? Doesn't that mean the note seller now owns the property? Would this now be an unsecured note? The note is listed as performing... why would a borrow continue to pay on a note on a property he no longer owns?
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If the seller has received a signed DIL from the borrower on the note, then it is more of an REO deal. This happens a lot with note deals as it happens for us around 30% of the time. The borrower may be in the property on their way out. You will still want to run an O&E report to ensure that their are no junior liens tying up title on the property. If there is, you will not want to accept the DIL as those liens will fall into first position if you record the DIL. Feel free to PM me for more info.