| Using a deed in lieu of foreclosure is becoming a | | | | start to increase easier with even a few less late |
| more common solution for homeowners to escape | | | | payments. In other words, the fewer late payments |
| the pain of the foreclosure process. They will not be | | | | the homeowners show, the easier it will be to |
| able to save the home using this method, but it can | | | | recover. |
| effect a mutually beneficial solution to the problem | | | | Also, the deed in lieu can help because, by ending the |
| with the lender. The homeowners will have to give | | | | foreclosure earlier, the foreclosure victims will |
| up title to the property, but this may be a better | | | | immediately start getting some distance from the |
| solution than having it forcefully sold out from under | | | | whole process. The deed in lieu can make an end of |
| them at a county sheriff sale. | | | | the ordeal months sooner than watching the home |
| A deed in lieu of foreclosure would not directly affect | | | | be taken away by the legal mechanisms of |
| the foreclosure victims' credit very much at all, which | | | | foreclosure. The further away in time the |
| is one of the few drawbacks of using this tactic, | | | | homeowners can get from the foreclosure, the less |
| along with the fact that the house is not saved in | | | | it will affect the decisions of other creditors to loan |
| the first place. Their credit report will show the | | | | them money in the future, including buying a new |
| mortgage loan's status as being closed but reflecting | | | | home. |
| the use of a "Deed in Lieu." This is only slightly better | | | | For example, a foreclosure that has just ended two |
| than if the credit report just said the loan had been | | | | months ago will look very bad to a creditor, and will |
| closed due to a full "Foreclosure." | | | | ensure the applicants receive the highest interest |
| However, the deed in lieu can affect the | | | | rate, if they can get approved for a loan at all. But a |
| homeowners' credit history indirectly in a number of | | | | foreclosure that is six months ago, or two years ago, |
| positive ways. These should not be overlooked, as | | | | will allow the homeowners to get back on track just |
| they can vastly increase their financial footing just | | | | that much quicker, and qualify for better loans with |
| after the foreclosure and for years afterwards. | | | | lower costs of borrowing, if they decide to finance a |
| First, by giving the deed in lieu, the homeowners will | | | | purchase. |
| end the foreclosure process sooner than if the house | | | | Therefore, if a deed in lieu is the only option that |
| is allowed to go through the entire court system until | | | | homeowners left to stop foreclosure, it is probably a |
| it is sold at the foreclosure auction. That means the | | | | good idea to offer it to the bank and just try to |
| foreclosure victims' credit reports will show fewer | | | | move on with their lives. Giving up a house voluntarily |
| months of late mortgage payments. Instead of nine | | | | is never an easy decision, but it can give the |
| months of late payments and then a foreclosure, the | | | | foreclosure victims an escape from the entire |
| credit history may reflect six months and then a | | | | process and give them the fresh start and |
| deed in lieu. Admittedly, this is only a small | | | | opportunity they need to begin the rough road of |
| consolation, but the credit score may stabilize and | | | | financial recovery. |