[WSBARP] Judgment for Deed

[Richard Holland]

Ok, so this one can get you pretty far out in the weeds if you think about too long, as I have been, so I am hoping for some insight.

Situation:             Bank sues debtor and gets a judgment for balance owed etc. and that includes the order to judicially foreclose.
Bank wants to do a deed-in-lieu, presumably to avoid the 8 month redemption period, delays in getting to sale and getting the deed from the Sheriff after redemption and so on.  I have to assume the debtor is willing to cooperate.  Total guess but it seems likely it is a cash for keys or we won't destroy your credit sort of thing (again just guessing).
                                Title says, to them, the judgment already extinguished the DOT and other items on record below it.  I mean the title right now is squeaky clean (except for the judgment).

Questions:          1).  If a traditional deed-in-lieu of foreclosure is done and the judgment 'vacated', wouldn't that mean that any junior lien holder essentially 're-appears' on title?
                                2).  Can you exchange a deed from the debtor in 'satisfaction' of the judgment instead and avoid the undesirable result of #1?  Again, remember that the debtor is willing to do this.
                                3).  Is it even proper to do any sort of DIL when there is a Judgment - so an order from the Court - that says 'after foreclosure and sale' or does the judgment need to be modified first?

Sincerely,

Richard L. Holland

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