What Is A Deed In Lieu Of Foreclosure?
There are numerous ways to stop a foreclosure on your home. Some of these ways, including refinancing, are options for those who can still make payments. For those who are out of options, losing your house may be inevitable, but you can still avoid the lender foreclosing on your home. This is beneficial because having a foreclosure on your credit report will hurt your credit score. In this article, the Columbus, OH foreclosure defense attorneys at Kohl & Cook Law Firm, LLC will discuss deed in lieu of foreclosure as a potential option to explore if you can no longer make payments on your mortgage.
What is a deed in lieu of foreclosure?
A deed in lieu of foreclosure is an option to transfer the title of your home to the mortgage lender in exchange for being released from your mortgage obligations. The document allows mortgage holders to satisfy a mortgage loan that’s in danger of defaulting. It allows you to avoid the foreclosure process which can harm your credit score. A deed in lieu of foreclosure often benefits both the lender and the borrower. Foreclosure proceedings can be expensive and time-consuming for the lender and impact the borrower in many negative ways.
While having a foreclosure on your credit report is worse than having a deed in lieu of foreclosure on your credit report, the deed in lieu of foreclosure can still impact your credit score. That’s why it’s important to take this measure only as a last resort. An Ohio foreclosure defense attorney can help you analyze all of your options before proceeding to a deed in lieu of foreclosure. Kohl & Cook Law Firm, LLC helps borrowers weigh all of their options when facing the foreclosure of their home.
Advantages of a deed in lieu of foreclosure
A deed in lieu of foreclosure has several advantages over the lender foreclosing on your home. These include:
- Less impact on your credit score – A deed in lieu of foreclosure will drop your credit score anywhere between 50 and 125 points. With a foreclosure, the drop is significantly higher, between 80 and 160 points.
- Foreclosures are a matter of public record – When a property is foreclosed on, it comes with public notice of the foreclosure on your door. A deed in lieu of foreclosure is not quite as embarrassing.
- Avoiding further financial loss – In foreclosure, the lender could go after you for the difference in the lender’s proceeds from the sale and the amount still owed on the mortgage. Lenders are generally willing to forgo the remaining debt when you sign a deed in lieu of foreclosure.
There are several disadvantages to a deed in lieu of foreclosure as well. You should explore all other options before signing the document. It will still hurt your credit score and you will lose all existing equity in the property. You can hire a foreclosure defense attorney to analyze all your options.
Contact a Columbus, OH Foreclosure Defense Attorney Today
Kohl & Cook Law Firm, LLC represents the interests of homeowners who are facing foreclosure. Call our office today to schedule an appointment, and we can begin discussing your options right away.
