Deed in lieu?

Question

Would a deed in lieu completely clear the credit on the home owner?

Ali Shah · Answer

deed in lieu is just a friendly foreclosure. Credit impact is the same as a foreclosure. Banks are not so easy now these these on short sales but they still get a better rating than foreclosures on your credit report.

Rob Gillespie · Answer

Tyler,
Deed in Lieu is looked at like a foreclosure by banks. It may give a temporary relief to the pain of owning the home, but the scar of a foreclosure will be long lasting. :mrgreen:

D.L. Berry · Answer

Typically, if a bank accepts a deed in lieu of foreclosure it will clear the debt. Their credit report will usually reflect deed in lieu for 7 years. The advantage is that it's a much quicker scenario. The down side is there can't be any other liens or judgements against the property. Often, by the time someone is considering short sale or deed in lieu of foreclosure, the dominos have already begun to fall...

Colbert Saint-Laurent · Answer

The lawyer putting that in writing is up to you, if he can;t put that in writing find another lawyer.

Joel Owens · Answer

"her lawyer is telling her that a deed in lieu will wipe her name off of it and clear her of that particular credit."

Will that lawyer GUARANTEE that in writing and face legal ramifications if they are incorrect?? I DOUBT IT.

From attorneys talk is cheap and when they have to stand behind something they run.If it's not guarantee in writing you can't take it for face value.

DIL the banks will do a title search and with no other junior liens will usually accept within about 60 to 90 days time.

If the effect to the credit is the same or close the seller might be able to milk free rent longer with a short sale or a foreclosure or get cash for keys money.The sellers situation will dictate the best options for them and it's a case by case basis.

Mitch Kronowit · Answer

From what I can gather, a deed in lieu carries nearly the same credit impact as a foreclosure. A short-sale may actually be better.

http://www.mortgagefit.com/deedinlieu/affectcredit.html

Tyler S. · Answer

I'm asking because were deciding between shortsale and deed in lieu and her lawyer is tellin her that a deed in lieu will wipe her name off of it and clear her of that particular credit. What are your opinions on shortsale vs deed in lieu?

Mitch Kronowit · Answer

Will a bank accept a deed in lieu if the homeowner is current on his mortgage? Seems like you would have to be late on your payments FIRST, then the lender might consider the deed in lieu, but by then, your credit will have already been dinged.

Emilio Ramirez · Answer

Not sure what you are asking here, but a deed in lieu or a friendly foreclosure would save the bank some money by not having to go through the foreclosure process. The hit by the homeowner on their credit score is the same. I'm not sure how long it stays on their record, however. I assume it is 7-10 years like a regular foreclosure.

If it is credit score you're asking about. Do a search. I feel this has been discussed here before.

Deed in lieu?

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