If your house is about to be foreclosed on, and you can’t sell it with a short sale or any other program, the best option may be a deed-in-lieu.
Short for deed-in-lieu of foreclosure, this means you sign the deed of the house to your lender in exchange for them agreeing not to further pursue the foreclosure. This normally isn’t an option until the homeowner attempts to sell the house via short sale, but if no acceptable purchase offers have been received, the bank may then proceed to accept the deed-in-lieu.
The challenge to a deed-in-lieu of foreclosure is the challenge of getting the lender to accept it and also the fact that the house owner has no control of the terms and timing. Also, it will still impact the house owner’s credit, perhaps more so than other options.
We only recommend house owners only pursue a deed-in-lieu if our attempts at completing a short sale are not successful. We’ve helped hundreds of people complete shorts sales, though, and we feel good about our chances to help you too.