What is a deed in lieu of foreclosure?
A deed in lieu, in the most simple of terms, is an amicable walk-away. That means that both parties involved, my client, which is the borrower homeowner, and the bank, agree that, as opposed to going through the long drawn out entire foreclosure court process, we’re going to stop that case short, and my client is going to agree to give the property back to the bank through the deed.
When we do that, my client then wants some different incentives, and that’s the negotiations that we get involved with, in order to do that walk away. Sometimes those incentives involve what we call “waiver of deficiency”, which means the bank doesn’t come after my client for any money as it relates to the loan. An extended process of time that my client can reside in the property, or sometimes, some relocation assistance, commonly referred to as “cash for keys.”