foreclosure

tandonan · Joined: 17 Jul 2006 Posts: 7 0.65 Dollars($)

what does deed-in-lieu of foreclosure mean? does it really help a mortgage borrower?

Samantha · Posted: Tue Jul 18, 2006 10:19 am Post subject: deed-in-lieu of foreclosure

Hi Tandonan,

Welcome to MortgageFit Forums.

A Deed-in-lieu of foreclosure can be considered as an alternative measure to avoid a foreclosure. Under mutual agreement between the lender and the borrower a deed in lieu may be submitted by the borrower.

Through this, the borrower deeds the property back to the lender when he faces an inevitable foreclosure and loss of property. In effect, the lender becomes the new owner of the property.

The purpose for a property transfer through deed-in-lieu is to avoid the foreclosure. The borrower gets released from all obligations regarding the mortgage payments. It still shows up on your credit but has less severe effects compared to a foreclosure.

You can find more information in our deed-in-lieu section and can go through this small discussion on the subject.

Feel free to ask if you have more doubts.

God bless you.

For MortgageFit,
Samantha

blue · Posted: Tue Jul 18, 2006 11:35 am Post subject:

Hi Tandonan,

There are several advantages offered by a deed-in-lieu to both the borrower and the lender. For the borrower the main advantage is that he can immediately get released from most or all of the obligations associated with the defaulted loan. The borrower also can avoid the public notoriety of a foreclosure proceeding. In that way he can get more generous terms than he could get in a formal foreclosure.

Deed-in-lieu is also advantageous to the lender as it saves his time and cost associated with a foreclosure.

colin · Posted: Tue Jul 18, 2006 11:51 am Post subject:

Lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily.

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