Many homeowners who are in financial distress find themselves in foreclosure. The stress and anxiety that foreclosure causes can make it easy for a homeowner to simply give up and put their head in the sand. Many homeowners feel there is nothing further they can do and they just want to let their home go to foreclosure. A deed in lieu of foreclosure may be a good option for the borrower who needs to stop foreclosure but can no longer afford to keep their home.
Foreclosure does not necessarily get you off the hook with the lender. Your lender can come after you for any funds that were not recovered after the foreclosure sale.
If a homeowner simply does not want their home and they are unable to sell their home then a deed in lieu of foreclosure may be the answer.
It is much wiser to stop foreclosure through a deed in lieu than let an underwater property go through foreclosure. This allows you to free yourself of all debt in exchange for the deed.
Basics of a Deed in Lieu of Foreclosure
Deed in lieu of foreclosure is an agreement that on the surface is very similar to simply letting your home go to foreclosure.
A deed in lieu allows you to simply hand over your home free and clear of any further obligation to your lender.
If you play your cards right you may be able to get some cash as well. Many homeowners are also able to obtain thousands of dollars in financial aid through a program known as Cash for Keys. 1500 - 3500 dollars is often given to homeowners who agree to a deed in lieu of foreclosure as foreclosure relocation assistance.
Another solid reason to stop foreclosure with a deed in lieu rather than just letting your home sell at a foreclosure auction is your credit score.
Though a homeowners credit score is not going to be in good shape no matter what by the time it gets to this point. Homeowners who stop foreclosure through a deed in lieu or short sale will find that their credit scores begin repairing much sooner than those scores of homeowners who remain head first in the sand and simply watch their home go into and all the way through the foreclosure process.