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Does a deed-in-lieu of foreclosure absolve the lender of a responsibility to repay a grant?

April 26, 2017absolve deed-in-lieu foreclosure Lender repay responsibility

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Does a deed-in-lieu of foreclosure absolve the lender of a responsibility to repay a grant?

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No, a deed in lieu of foreclosure does not mean that the subsidy is forgiven because it does not extinguish the liens on the property. The subsidy can be forgiven upon a foreclosure, but the member lender still has a duty to try to recover the subsidy amount in the property at a sheriff’s sale.