How does deed in lui of foreclosure work?
Question:
Answer:
It is when you surrender your deed instead of going through a foreclosure. This can save a lot of money for you since they do not have to go through the foreclosure process.
I do this for a living. A deed in liew of foreclosure is a deed to the property that you give to the lender so that the lender does not need to go through foreclosure. You need to be careful and comfortable with the value of the property in relation to the debt. That is, a DIL is not a good idea if there is a lot of equity in the property. You would be better off to try to sell the property before the foreclosure.
You cannot use a DIL if you have other junior liens against the property because the lender will not get clear title.
The advantage to you of a deed in lieu is that, at least marginally, the DIL is less of a bad credit mark than a foreclosure is.
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