What is a deed in lieu of foreclosure? Can a deed of foreclosure help me keep my home? If you are facing foreclosure then you may be desperate to find a way to prevent this action so that you can keep your home. This has caused many individuals to consider a deed in lieu of foreclosure, but there are some common misconceptions about this practice that need to be addressed.
Using a deed in lieu of foreclosure will not prevent the loss of your home, but that does not mean that you should quickly eliminate this method from consideration. If you can not find an option that will prevent the loss of your home then a deed in lieu of foreclosure can help minimize the impact that the foreclosure has on your life and your credit rating.
When you agree to a deed in lieu of foreclosure you may see many benefits as well as potential pitfalls and drawbacks. This process will mean that you lose your home but it also offers a number of advantages that you may desire as well.
How Can I Arrange A Deed In Lieu Of Foreclosure?
If you are interested in a deed in lieu of foreclosure then the first step is to contact the lender who holds your mortgage. If the lender will not agree to the process then you may need to take another step instead, such as bankruptcy.
The bankruptcy court can return the home to the lender and wipe off any debt that you owe on the mortgage in many cases. In addition bankruptcy may also wipe out a number of other debts as well. Each case is different, and some lenders will agree to a deed in lieu of foreclosure to limit the costs and time required to go through the foreclosure process.
How Does A Deed In Lieu Of Foreclosure Work?
When the lender agrees to a deed in lieu of foreclosure the process is fairly simple. The deed to the property is transferred from your name into the name of the lender. This transfer wipes out any remaining mortgage obligation and any late fees or other charges that they lender may have applied to the property account.
If you know that you will lose your home to foreclosure then a deed in lieu of foreclosure may be the right answer. You will eliminate any mortgage debt and accumulated default fees, and prevent a foreclosure from showing up on your credit reports.
If foreclosure occurs this can damage your credit for many years to come. If the foreclosure is on your credit report this can affect you employment, your housing situation, and even what you pay for auto insurance in some states. A qualified debt relief specialist can help you determine which debt relief methods are ideal in your situation. In some cases this may be a deed in lieu of foreclosure, but in other cases there may be a better option available.