What is a deed in lieu of foreclosure?
A deed in lieu of foreclosure is an agreement between the lender and the homeowner in which the homeowner gives their house to the lender in lieu of a foreclosure taking place.
A deed in lieu benefits the lender by avoiding the delays and costs of the lender going through the foreclosure process. It benefits the homeowner by allowing them to leave the home without having a foreclosure reported on their credit report.
The agreement usually includes the understanding that the mortgage debt is paid in full.