A deed in lieu of foreclosure is an arrangement you make with your lender to avoid foreclosure after you’ve exhausted all other options. When you make this agreement, you transfer your house’s deed to your lender. Your lender then forgives the amount left on your loan and agrees to not foreclose on your home. And don’t worry, a deed in lieu of foreclosure is nothing to be ashamed of, thousands of Americans find themselves in tricky situations from job loss to medical bills.
A deed in lieu of foreclosure is normally used as a last resort. And a deed in lieu of foreclosure may be a good option for you if you are:
- Behind or no longer can afford your mortgage payments
- Underwater on your mortgage
- Facing a long term financial hardship
- Struggling to sell your home
- Don’t have a lot of equity in your house
- Trying to avoid public notoriety
- Don’t want an eviction from your home