A Little-Known Option: Deed in Lieu of Foreclosure
Hard times come and go, however, sometimes experiencing hard times can have a lasting effect on your life as well as your finances. When hard times begin to affect your finances, everything you have worked hard for can potentially land in jeopardy, including your home in some cases. This situation may lead to your mortgage company pursuing a foreclosure on your home. If a foreclosure action occurs, it harms your credit score and also risks access to future loans, but there is another option.
How Does a Deed in Lieu of Foreclosure Work?
If you are facing an Alabama foreclosure, you may be able to exercise an option other than foreclosure called a deed in lieu of foreclosure. A deed in lieu of foreclosure is an instrument in which you convey all of your interest in your home to the lender in order to satisfy a loan that is in default and avoid foreclosure proceedings. Essentially, this means that you are giving the deed to your house to your mortgage company in lieu of your home being foreclosed on.
Though it may not seem like a good option because you are not going to keep your home, it is advantageous to you because it is not considered a foreclosure from the perspective of credit reporting. Specifically, a foreclosure is not listed on your credit report, enabling you to potentially apply for a future loan. In most circumstances, to be able to receive a deed in lieu of foreclosure, you may have to show the mortgage company that you tried to sale your home and was unable to. However, there may be more requirements to receive a deed in lieu of foreclosure and therefore, it is in your best interest to seek legal advice if you are considering this option.
Contact a Foreclosure Defense Attorney
A deed in lieu of foreclosure is not always a perfect solution, however, sometimes it brings about the best possible outcomes. Because of the complexity with these matters, and everyone’s situation being different it is best to seek legal advice and representation if you find yourself in this situation. If you or a loved one’s home is about to be foreclosed on, it is in your best interest to contact a family law attorney to assist with your case.