A deed in lieu of foreclosure is a voluntary agreement in which the homeowner gives the lender ownership of the property in exchange for the lender forgiving the outstanding mortgage debt. In some cases, a deed in lieu of foreclosure can be a good option for a homeowner who is facing foreclosure and is unable to sell the property or refinance the mortgage.
If you are in foreclosure in New York and are considering a deed in lieu of foreclosure, it’s important to understand how this option may affect your financial situation and your credit score. In general, a deed in lieu of foreclosure can be less damaging to your credit than a foreclosure, but it will still have a negative impact on your credit score.
Before you decide to pursue a deed in lieu of foreclosure, it’s a good idea to speak with a housing counselor to understand all of your options and to determine whether a deed in lieu of foreclosure is the best choice for you. A short sale is a real estate transaction in which the homeowner sells their property for less than the amount they owe on their mortgage. A short sale can be a good option for a homeowner who is facing financial hardship and is unable to make their mortgage payments, but is still able to sell their property.