subject: Deed In Lieu Of Foreclosure Option [print this page] Deed In Lieu Of Foreclosure Option Deed In Lieu Of Foreclosure Option
Deed In Lieu Of Foreclosure
Deed-in-lieu of Foreclosure(DIL) is a when a lender or a mortgage company takes back a property from a borrower with consent. It is similar to a permission based repossession, except it is a lot easier on a borrower's credit report. This is often done for homeowners who are simply unable to afford to keep up with their mortgage payments, and they have had no luck with trying to sell their home to a third party. A deed-in-lieu is done to avoid a foreclosure sale. A foreclosure sale is costly to a mortgage company and they try to avoid it as much as possible, but there are times when they have no choice but to foreclose on a home for non payment. Deed in lieu can sometimes take the place of a foreclosure occurring, which is a good thing.
A realistic order of a borrower progressing to a DILof foreclosure start with some unusual or unfortunate event such as: unemployment, death, divorce, curtailment of income, among other things. We all know most homeowners do not buy a home to end up going past due on their mortgage. Once a homeowners starts to go past due on their mortgage payments they are likely to try to get some kind of mortgage assistance. They often start off by requesting for a loan modification, and if that does not work out for them, they might go on to request a short sale followed by a DIL. A mortgage company has to agree to take back a property from a borrower, by doing so this saves the homeowner from going into foreclosure sale situation.
The mortgage company will make arrangement with the homeowner to vacate the property in a timely manner. The borrower then walks away and is no longer obligated or responsible to make payments of the mortgage anymore. A DIL is view as a settlement a homeowner's credit report, unlike a foreclosure. A foreclosure is extremely damaging to anyone's credit. Homeowners that have been granted a DIL are consider to be rather fortunate, because most borrower would not be granted this option; this is a good option if loosing the property is not a big deal to go through for the person loosing the property.
