You can secure attorneys to assist you in any negotiations. However, real estate is based upon state law for the state in which it is located. Although most Mortgages and Notes contain language that allows for the documents to comply with federal law and be traded in all states, there can be state specific provisions in any legal document involving real estate. The same is true with foreclosure laws as they are state specific.
Additionally, chain of title may be an issue. For example, the original lender may not wish to engage in any transfers that would require recording where there is a now a subsequent and, thereby, junior lender on title. Priority may be lost and the date of recording of your desired transfer may control to the detriment of the lender. Since this is a state specific issue, any such questions would need to be discussed with an attorney licensed to practice law in that state.
It may be possible to find an attorney that practices real estate in both Florida and Illinois. That person may also be willing to negotiate on your behalf with your lender and even to represent you in the foreclosure. Your local bar association may have a listing of such attorneys.
Although no legal advise can be given, a practical suggestion would be to verify with your lender that it would be open to such negotiations. Before you incur any significant fees or costs, you would want to know if this is an option with the lender. You could also use that call to inquire over what types of documentation would be required. Also, you could ask which of the many documents providing value, such as tax bills, purchase price, market analysis by real estate agents or certified appraisals, would be needed to establish the required baseline values for such a swap.
Finally, with the property being in foreclosure, the lender may require cash monies as opposed to different collateral. This is a question that needs to be addressed to the lender. An attorney may be of assistance here as you may also wish to retain counsel to represent you in the foreclosure. Such representation could provide both a review of potential defenses and implement a strategy to provide you the needed time to conclude any such negotiations. Additionally, the attorney may be able to communicate with the lender through the foreclosure attorneys and facilitate the desired negotiations.
Answered on Oct 31st, 2011 at 2:11 PM