Sign A Deed In Lieu – How To Stop Foreclosure

Another way to stop foreclosure is by signing a deed in lieu of foreclosure with your lender. This involves you having to deed your home back to your mortgage lender. This deed needs to be prepared and notarized by your lawyer. Once you lawyer hands over the deed to your lender, he will cancel he mortgage (forgive), which also cancels the foreclosure process.

Your lender might make arrangements for you to remain in your home until you find a new place to move to. If you are not offered this courtesy, it can’t hurt to ask anyway.

The good thing about a deed in lieu of foreclosure is that it allows you to skip a lengthy and possibly expensive foreclosure process. It might also help to avoid further damage to your credit score.

Your mortgage lender may have reported to credit bureaus that you missed payments, but he will not report a deed in lieu of foreclosure. A foreclosure action will show up on your credit report, lowering your score.

One thing to remember though is that if you ever wanted to apply for another mortgage loan, you will have to disclose if you have been involved in a deed in lieu previously.

One negative aspect of a deed in lieu is that lenders are usually not so keen to move ahead with this process because it is often more costly for them to deal with possible renovations or selling the property on.

Usually deeds in lieu are performed on non-owner occupied properties. You will not be exempt by tax liability if you sign a deed in lieu and it is helpful if you check possible costs before doing so.

This marks the end of our four part series on how to stop foreclosure.