Signing your house over to your lender may satisfy the amount owed on your mortgage.
What is a Deed in Lieu of Foreclosure?
A Deed in Lieu of foreclosure is when the lender agrees to release the borrower from all mortgage obligations and in exchange for the borrower surrendering their home to the lender.
The borrower may receive move out assistance, sometimes referred to as “cash for keys”.
“Deed in Lieu can help you avoid a public sale or auction and may also help you start rebuilding credit sooner than if you go through foreclosure.
What are the benefits?
A deed in lieu of foreclosure offers several advantages to both the borrower and the lender. –The principal advantage to the borrower is that it immediately releases the borrower all of the personal indebtedness associated with the defaulted loan.
The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure.
Another benefit to the borrower is that it hurts his/her credit less than a foreclosure does. Advantages to a lender include a reduction in the time and cost of a repossession, lower risk of borrower revenge (metal theft and vandalism of the property before sheriff eviction), and additional advantages if the borrower subsequently files for bankruptcy.
POSSIBLE WAYS TO PREVENT FORECLOSURE
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