Minimize Credit Damage With A Deed In Lieu Of Foreclosure

Minimize Credit Damage With A Deed In Lieu Of Foreclosure

In today's economy, many are considering foreclosure because they are unable to make their payments or their financial circumstance has left them without a choice.? Has anyone ever told you about a deed in lieu of foreclosure? A deed in lieu of foreclosure is another, often lesser known option of getting out of your home and minimizing the damaging results to your credit, and costs to the lender. The hardest hit areas of the country, areforeclosures in Arizona, Nevada and California.

How does it work? Both parties may find that this process is preferred because of the benefits to all involved. Before you consider going down this path, first consider the possibility of renegotiating or refinancing your current loan with your lender. After all, lenders don't like to own real estate, they are in the business of lending money and collecting interest.

Alright, here are the basics. The homeowner first asks the bank if they would be willing to consider a deed in lieu of foreclosure. If they are, they then enter into a good faith agreement that clearifies that all parties are agreeing to proceed with this instead of the more problematicforeclosure or short sales. The bank then works out with the borrower the terms of when the borrower will move out of the home and the bank will take ownership. The initial agreement is just the beginning, and you can expect more paperwork, but the process is considerably more favorable, and simple.

Now, why consider this option rather than foreclosure? Banks tend to favor this process for several reasons. One is that the borrower is less likely to vandalize the home and take appliances and otherwise damage the home before moving out. Many banks also find this process to be less expensive because they avoid the lengthy foreclosure and eviction process, and can move onto to selling the property sooner.

The lender isnt't the only side to benefit. The borrower may find that their credit is in better shape afterwards, than it may be with foreclosure. Credit can begin to be repaired sooner, and the homeowner can start to live a normal life once again. The borrwoer also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he/she would in a formal foreclosure.

The bottom line is that you were responsible enough to get yourself into your home, you should be responsible enough to get yourself out, and to so with the best results for everyone involved. Lenders are all different, and you might be surprised how willing they are to work with you in keeping your home.

Having lived all over the west coast, I hope that the real estate market can turn around and benefit the economy in a positive way.. For those of you Realtors out there, if you are looking to benefit from this type of market, consider shifting your business with foreclosurereal estate leads. All agents could use more business, and one way to get that business is with leads. Let a service like Boomerang Leads provide you with an incredible website that generates leads day after day.

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