Deed in Lieu of Foreclosure
A deed in lieu of foreclosure is a process in which you freely offer the deed to the property back to the mortgage lender. Instead of forcing the lender to forcefully take the house from you, you simply offer to give it back. By doing this, you can significantly speed up the process when compared with foreclosure. A foreclosure often takes many months to complete. With a deed in lieu of foreclosure, you can get it over with in a few weeks or months.
Living in the Property
When offering the lender a deed in lieu of foreclosure, there are no rules that say you have to continue living in the property. During this period, you may wish to move out of the house and get started looking for alternative housing arrangements. If the deed in lieu of foreclosure does not go through, you will most likely lose the house to foreclosure anyway. At that point, you will be forced to move out of the property. By moving out early, you simply get a head start on the process.
Staying Through the Process
When a deed in lieu of foreclosure becomes an option for you, it most likely means that you are no longer able to afford your mortgage payment. Because of this, you could miss a few mortgage payments. While you are waiting on the bank to accept or decline the deed in lieu of foreclosure, it might make sense to stay in the property. Since you are not making your mortgage payment anyway, this is essentially like living somewhere for a few months with no rent.
Working With the Lender
Before you can complete a deed in lieu of foreclosure, you will have to work with the lender, for it is up to the lender to accept the deed. If the lender does not want to take the deed in lieu of foreclosure, it could simply foreclose on your home. In some cases, the lender may want you to put forth an effort to sell the house before the lender is willing to take a deed in lieu of foreclosure.
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