What is a deed in lieu of foreclosure?

A deed in lieu of foreclosure is a legal agreement in which a borrower transfers the title of their property to the lender in exchange for debt relief. This document allows a borrower to avoid the lengthy foreclosure process and is usually used when a borrower is struggling to make their monthly mortgage payments. In New York, a deed in lieu of foreclosure is a way to avoid a full foreclosure by transferring ownership of the property to the lender. The deed in lieu of foreclosure is a voluntary agreement between the lender and borrower. The agreement makes it so that the borrower no longer holds the deed to the property. This means that they are no longer responsible for the property and the lender can take full ownership. When a lender receives a deed in lieu of foreclosure, it is not the same as taking ownership of the property. The lender can still market and sell the property and recoup a portion of its losses from the original loan. In some cases, the lender may even extend a new loan to the borrower. Deeds in lieu of foreclosure are fairly common in New York. As long as both the lender and borrower are in agreement with the deed, it can provide a beneficial resolution to a difficult situation.

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What is a deed in lieu of foreclosure?

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