DEED-IN-LIEU OF FORECLOSURE
A Deed-In-Lieu of Foreclosure
is an agreement between you and your lender for you to sign the deed on your property over to them and voluntarily "give back" the home instead of proceeding with foreclosure actions.
The main advantage of a deed-in-lieu of foreclosure to the borrower is that it immediately releases them from most or all of the personal indebtedness associated with the defaulted loan. A deed-in-lieu of foreclosure can also be more discrete and private than foreclosure proceedings and the borrower may be able to negotiate with their lender and/or receive more generous terms than they would in a formal foreclosure.
Another benefit to the borrower is that it can be less damaging to their credit than a foreclosure. A deed-in-lieu of foreclosure generally causes more damage to the credit than a short sale but less than a foreclosure. Your lender will most likely report the deed-in-lieu as a "voluntary foreclosure" or "voluntary surrender" to the credit reporting agencies.
The main advantage to the lender is that they are able to reduce the time and and expenses associated with going through the formal foreclosure process. After a deed-in-lieu is completed the property is considered an REO (or Real Estate Owned by the bank) and is typically placed on the market and listed for sale with a local real estate agent.
Because the deed-in-lieu process does generally cause more damage to your credit than a short sale we highly recommend attempting to complete a short sale with a local real estate agent and a professional negotiation company before deciding to negotiate a deed-in-lieu with your lender.
If you need assistance in reviewing your situation and determining the best option for you to proceed with, please call us today for a no obligation consultation.
The main advantage of a deed-in-lieu of foreclosure to the borrower is that it immediately releases them from most or all of the personal indebtedness associated with the defaulted loan. A deed-in-lieu of foreclosure can also be more discrete and private than foreclosure proceedings and the borrower may be able to negotiate with their lender and/or receive more generous terms than they would in a formal foreclosure.
Another benefit to the borrower is that it can be less damaging to their credit than a foreclosure. A deed-in-lieu of foreclosure generally causes more damage to the credit than a short sale but less than a foreclosure. Your lender will most likely report the deed-in-lieu as a "voluntary foreclosure" or "voluntary surrender" to the credit reporting agencies.
The main advantage to the lender is that they are able to reduce the time and and expenses associated with going through the formal foreclosure process. After a deed-in-lieu is completed the property is considered an REO (or Real Estate Owned by the bank) and is typically placed on the market and listed for sale with a local real estate agent.
Because the deed-in-lieu process does generally cause more damage to your credit than a short sale we highly recommend attempting to complete a short sale with a local real estate agent and a professional negotiation company before deciding to negotiate a deed-in-lieu with your lender.
If you need assistance in reviewing your situation and determining the best option for you to proceed with, please call us today for a no obligation consultation.
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Integrated Residential Companies, LLC
7025 E. Greenway Parkway, Suite 450, Scottsdale, AZ 85254
7025 E. Greenway Parkway, Suite 450, Scottsdale, AZ 85254
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