What is the difference between a foreclosure and a deed in lieu of foreclosure?

A foreclosure and a deed in lieu of foreclosure are both methods of transferring ownership of a property back to the lender, but there are some key differences between the two. In a foreclosure, the lender, also known as the mortgagee, initiates a legal process to repossess the property from the borrower, also known as the mortgagor, when the borrower stops making payments. The lender will then auction off the property to the highest bidder. In a deed in lieu of foreclosure, the borrower proactively decides to give the property back to the lender in exchange for a release from the mortgage debt. The lender may agree to accept a deed in lieu of foreclosure if they determine that it will cost them less than going through a foreclosure. The main difference between a foreclosure and a deed in lieu of foreclosure is that in a foreclosure the lender takes the property back regardless of the borrower’s wishes, whereas in a deed in lieu of foreclosure the borrower has to agree to the process. In Washington State, foreclosure is governed by the Foreclosure Fairness Act, which outlines how lenders must proceed with a foreclosure.

Related FAQs

Is it possible to negotiate with a lender during a foreclosure?
What are the foreclosure laws in my state?
What is a foreclosure defense attorney?
Can a lender foreclose on a property without a court order?
How can I find out if I am a victim of wrongful foreclosure?
What is a post-foreclosure redemption period?
What happens to my credit score after a foreclosure?
What are the legal consequences of a foreclosure?
What are the tax consequences of a foreclosure?
Can I pay off a foreclosure in full?

What is the difference between a foreclosure and a deed in lieu of foreclosure?

Related FAQs

Related Blog Posts