How does a Deed in Lieu of Foreclosure work?

With a deed in lieu of foreclosure, you have the option to voluntarily transfer ownership of your home to your mortgage company, if you cannot sell your home at fair market value or prefer to have your mortgage company sell your home.

How does a Deed in Lieu of Foreclosure help a homeowner?

A deed in lieu of foreclosure may release you from the obligation to repay your primary mortgage and may help you avoid a foreclosure sale, even if the foreclosure process has already started.

Benefits of Deeds in Lieu of Foreclosure

As the homeowner, you:

• Avoid foreclosure
• Avoid the hassle of court proceedings
• Can move on more quickly
• May be released from liability for the remaining balance on your primary mortgage

Please bear in mind that not every homeowner will be released from liability for the remaining mortgage balance. That is why it helps to consult an expert if you have a foreclosure problem.

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Benefits of Deed in Lieu of Foreclosure is a post from: Prevent Foreclosures

What is a deed in lieu of foreclosure?

A deed in lieu of foreclosure is a legal document conveying property to the lender after the borrower defaults on his/her mortgage payment.

What happens when the lender accepts deed in lieu of foreclosure?

When the lender accepts deed in lieu of foreclosure, the right to the deficiency judgement is waived. The lender takes possession of the property and, by doing so, avoids the cost of foreclosure, eviction, auction sale, etc. When this happens, the lender will not come after the homeowner for the difference between the amount owed and the proceed from the sale of the property. Usually the lender will not do this unless the lender feels like the homeowner has little wealth and it is not worth their time and cost in risking coming after the homeowner. Usually, even if the lender manages to file a deficiency judgement suit against the homeowner and successfully won, the homeowner still cannot pay.

Problems with deed in lieu of foreclosure

A homeowner should not expect all problems to go away when the lender decides to accept the deed in lieu of foreclosure. Deed in lieu of foreclosure process may not resolve all claims against the property. This is why the warranty deed is so popular to protect buyers against future claims against the property.

Deed in Lieu of Foreclosure is a post from: Prevent Foreclosures