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How do you proceed with a deed in lieu of foreclosure and what are the advantages?

In: Debt and Bankruptcy, Debt Collection, Foreclosure [Edit categories]

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One advantage is that the foreclosure process will end sooner. Once the bank accepts the deed in lieu of foreclosure, all of the legal procedures come to a end immediately. The bank accepts the deed as payment in full for the loan, and the homeowners are no longer in default of the mortgage.

Another benefit is the homeowners will not have as badly damaged credit as if they had gone through the full foreclosure. With the foreclosure process ending sooner, there are fewer missed mortgage payments. The bank typically reports late payments up until the month of the county foreclosure auction, which can result in many missed payments. With a deed in lieu of foreclosure, some of these can be avoided, as the foreclosure process is terminated early.

This, in turn, allows homeowners to begin recovering financially more quickly than if they had let the home go through with the entire foreclosure process. They can begin working on credit repair sooner rather than later.

First answer by Foreclosurefish. Last edit by Foreclosurefish. Contributor trust: 52 [recommend contributor ]. Question popularity: 14 [recommend question].

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