What exactly is deed in lieu of foreclosure??

Question

What exactly is deed in lieu of foreclosure??

Answer 1

when the owner who is behind in his mortgage assigns the

deed back to the lender RATHER than wait to be told to do so

via  a full foreclosure

Answer 2

YOu know you can not afford the mortgage payments. You know they will foreclose and the sheriff will come to escort you out.  So you just sign a deed today and the bank owns it. /

Answer 3

The bank buys back the house and you get to walk away

Answer 4

Check the wiki link

http://en.wikipedia.org/wiki/Deed_in_lie...

wow... the first guy just pasted in the wiki link as his answer.  Talk about plagiarism.

Answer 5

A Deed in lieu of foreclosure is a deed instrument in which a mortgagor (i.e. the borrower) conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure proceedings.

The 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 him/her from most or 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. Advantages to a lender include a reduction in the time and cost of a repossession, and additional advantages if the borrower subsequently files for bankruptcy.

In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Generally, the lender will not proceed with a deed in lieu of foreclosure if the outstanding indebtedness of the borrower exceeds the current fair market value of the property.

Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations.

Neither the borrower nor the lender is obliged to proceed with the deed in lieu of foreclosure until a final agreement is reached.

Answer 6

Deed-in-lieu – in this, those homeowners who need to sell their house in a foreclosure situation (and their property has been on the sale for 90 days), get a repayment plan. This is valid for those who are past due for two or more months in their payments.  

Answer 7

When you closed on your home, you were provided with a document that shows you are in title to the property.  A piece of paper that you give to the lender along with the keys.   Not a good choice, you may have other options.