A deed in lieu of foreclosure transfers your property back to the lender — you give the mortgage company your home to avoid a foreclosure on the property. This is an alternative to foreclosure and/or short sale, as an attempt to release you from debt. In Arizona, when you deed the property back, any debts related to the loan is forgiven.
How Does a Deed in Lieu of Foreclosure Differ From a Short Sale?
Another common way to mitigate your losses is to sell your home for less than what you owe. This process is called a short sale. In a short sale, your mortgage company allows you to sell your home for less than your remaining balance, potentially forgiving the remainder of the debt.
Short sales and deeds in lieu of foreclosure are similar in that the lender may forgive a certain portion, if not all of your remaining debt. Both a short sale and a deed in lieu of foreclosure must be approved by the mortgage company. Thus, having an experienced advocate on your side, is important.
Contact a Lawyer Today
If foreclosure is near, regardless of whether you’re seeking a loan modification, chapter 13 bankruptcy, short sale, or a deed in lieu of foreclosure, you should consult an attorney. There are several options for you to either save your home or mitigate your losses, and a real estate lawyer at Bellah Perez, PLLC can assess your case. Don’t wait for foreclosure. Call us today at (602) 252-9937.
Disclaimer: The answer is intended to be for informational purposes only. It should not be relied on as legal advice, nor construed as a form of attorney-client relationship.