A Deed-in-Lieu of Foreclosure Option to avoid formal foreclosure


Deed-in-Lieu of Foreclosure


Deed-in-Lieu of foreclosure, sometimes referred to as a “friendly foreclosure” can occur when the lender is willing to accept the “deed” alone as satisfaction of the outstanding loan balance.

These occur with increasing rarity since the typical equity deficiencies are growing to greater proportions and most homeowners have more than one loan against the property. But if there is only one loan, it may make economic sense for the lender to accept the deed and forego the expenses of a formal foreclosure.
 
When the lender agrees to accept the deed in lieu of foreclosure, the lender typically surrenders any further claims against you for any financial deficiencies. But this must be insisted upon. It is not automatic.
 

 
 
 
 
Deed-in-Lieu transactions only make sense where your equity is insufficient to pay the loan in full. The processes and procedures for completing a deed-in-lieu transaction are nearly identical to that of a “Short Sale” in that a true hardship and fully documented verification of insolvency must be proved.
 
 
 
  
We would be glad to assist you with determining whether or not a deed-in-lieu of foreclosure is an option for you to avoid foreclosure.

Posted by Clay & Kathie Kime - CDPE at 1/5/2009 7:00 AM
Categories: Virginia Short Sales, Foreclosures, Virginia Pre-Foreclosure
Tags: CDPE Virginia Avoid Foreclosure CDPE Short Sales Pre-Foreclosure Wall Street and Housing
 

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