Q:

When is the right time to ask for a deed in lieu of a foreclosure?

A:

Quick Answer

When a borrower is unable to pay a mortgage loan and unable to do a loan modification or a short sale, the next option is a deed in lieu of foreclosure, according to Nolo. This process allows a borrower to avoid foreclosure and bankruptcy.

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Full Answer

A deed in lieu of foreclosure releases a borrower from liability from a home loan by signing the deed to the property over to the lender, according to the Consumer Financial Protection Bureau. Borrowers may also qualify for relocation assistance from the federal government in this circumstance. In order to avoid additional repayment requirements, the agreement with the lender must state that the deed fully satisfies the debt, notes Nolo.

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