Deed in Lieu of Foreclosure?

There are many different ways a bank can help a home owner when they are behind on their payments. As we have mentioned in previous posts you can get a loan modification, forbearance agreement, short sale, and deed in lieu of foreclosure. All of these different methods will prevent the home owner from having to face foreclosure and having that on their credit.

So what is deed in lieu of foreclosure? This is the process in which the bank decides that they will take ownership and possession of your home instead of going through the foreclosure process. The bank decides that it is in your and their best interest to take the home and you return your keys and leave the home.

So why don't all banks do this? Well it is a very costly process for the bank. They are not in the process to own homes. They really like to lend money so others can buy property. They must have a staff to look after the homes, check on the homes, and have a real estate professional or bank staff member list and sell the home. They can only do this with so many properties.

So how do I get my bank to do this? This is where you have to stay in contact with your bank to see if they have a deed in lieu of foreclosure program and check to see how you get approved for it. You may not be able to apply for this program with your bank and the short sale program at the same time. Make sure that you get this cleared with your bank and understand all of the rules ahead of time.

We hope that clears up what a deed in lieu of foreclosure is and how it can help you if you are having trouble making your mortgage payments.