Download Adobe PDF ReaderDeed in Lieu of Foreclosure
A deed in lieu of foreclosure is a deed instrument in which a mortgagor (the borrower) conveys all interest in their home to the mortgagee (the lender) to satisfy their loan that is in default to avoid any foreclosure proceedings.
The lender will typically approve a deed in lieu when the property has been on the market for a reasonable time but has not obtained a reasonable offer.
Before the lender approves the deed in lieu of foreclosure the following conditions typically need to be met:
- There is clear title on the property
- This typically means that if there is a second mortgage, you may have to negotiate the payment and fulfillment of the second mortgage to remove the lien imposed by the second mortgage.
- Recently, banks have been providing money to the homeowner to assist them in the payment of their second mortgage.
- The home is in good condition