When you are facing losing your home, your entire world is turned upside down. Avoiding foreclosure is not impossible and there are many solutions that can help prevent this ruthless process from destroying your personal life. One settlement solution is known as a deed in lieu of foreclosure. This instrument was written into federal foreclosure laws to provide you with a negotiation method to stop foreclosure when your bank or mortgage lender is working behind the scenes to try and take your home through a long and expensive legal process.
Your home is considered collateral property. When you become a signatory to a mortgage or loan, the collateral property can be repossessed or transferred to another mortgage company. The advantages to having a deed in lieu of foreclosure gets you out from under an overdue mortgage. You give your lender back the keys to your property in exchange for walking away free and clear from your mortgage. Many homeowners are avoiding the debt that foreclosure brings to their personal finances by doing a deed in lieu of foreclosure.
Process for Deed in Lieu of Foreclosure
The process begins with a written agreement to your lender. Anytime that you are trying to avoid foreclosure, you must put requests in writing to start a paper trail with your bank or mortgage lender. Upon receipt of your written agreement, a lender will approve or deny the proposition for a grant or warranty deed. With expert assistance, a lender can and will accept an offer to transfer back the property and avoid expensive legal fees and collection costs that come with foreclosing on a property.
You can save your credit rating from being damaged for 7, 10 or 25 years by taking advantage of what a deed in lieu of foreclosure offers. The negotiation process is important and not every lender is willing to report positive information to credit bureaus when debt is not paid. If you are not qualified to take advantage of transferring your deed to avoid foreclosure, there are other options that you have available that can still get you out of your mortgage without ruining your credit rating.