Benefits of a Deed in Lieu of Foreclosure
Using a deed in lieu of foreclosure is becoming a more common option for borrowers to end the frustration of the foreclosure process. They will not be able to save the home using this method, but it can result in a mutually beneficial alternative to the problem with the mortgage company. The homeowners will have to give up title to the property, but this could be a better solution than having it forcefully auctioned out from under them at a county trustee sale.
First, by giving the deed in lieu, the borrowers will stop the foreclosure process earlier than if the home was allowed to go through the entire court system until it is sold at the trustee auction. That means the homeowners’ credit histories will show fewer months of missed loan payments.
Furthermore, the deed in lieu can help because, by stopping the foreclosure earlier, the foreclosure victims will immediately start getting some distance from the entire situation. The deed in lieu can make an end of the ordeal months sooner than seeing the home be taken away by the legal mechanisms of foreclosure.