WHAT IS A CONSENT FORECLOSURE?

A consent foreclosure is a pre-trial settlement of the underlying foreclosure lawsuit. A consent foreclosure is still a foreclosure in that the court enters a judgment of foreclosure against the homeowner, and the property is handed over to the lender. However, as the term "consent" implies, the judgement is entered in agreement -- e.g. the homeowner agrees to walk away from the property and end the foreclosure.

What is the benefit of a consent foreclosure?

One of the main benefits of a consent foreclosure is that the lender may waive its right to seek a deficiency judgment. A deficiency judgment allows the lender to come after the homeowner for the difference between the amount owed on the underlying loan and the proceeds of the judicial sale -- so if this difference is a significant amount, and the homeowner has other assets on which the lender could collect, a consent foreclosure may be an attractive option.

What is the downside to a consent foreclosure?

One of the downsides to a consent foreclosure is that the foreclosure proceeding itself will still be included in a homeowner's credit report.  If this is a concern for a homeowner, then another exit strategy such a short sale or deed in lieu of foreclosure may be a better option.

What if there is more than one mortgage on the property?

In the event the homeowner has a second mortgage on the property, the process for a consent foreclosure becomes a bit more complicated. This is because *all lenders* who have an interest in the property must agree to the consent foreclosure. If for example a junior mortgage lender (such as a second mortgage holder) is not able to recover any amount of what it is owed through the consent foreclosure process, then they may object and prevent the consent foreclosure from proceeding.

If you would like to learn more about consent foreclosure, an experienced attorney can help you navigate the process. At The Law Center, we are a team of specialists that are passionate about the foreclosure process from start to finish and helping homeowners at the highest level. Our staff and attorneys approach each client and each property as a new challenge, one that requires thorough analysis, zealous representation, and thoughtful strategy. It’s your home, let The Law Center help you defend it.

Call us now and speak with a foreclosure expert on how you can make the foreclosure process work for you -- not against you. (312) 600-8815

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