What’s the Difference Between Foreclosure and Deed In Lieu of Foreclosure
What’s the Difference Between Foreclosure and Deed In Lieu of Foreclosure
No Cumming homeowners wants to lose their house. But life’s circumstances can change without much notice. When this happens, foreclosure can come into play.
Finding that you are no longer going to be able to afford your Cumming house is a stressful time. And while you’ve probably heard ‘foreclosure’ before, it is not your only option if you cannot pay on your mortgage.
Cumming homeowners who find themselves in this situation need to be proactive. One such way to do so is to consider deed in lieu of foreclosure.
Understanding Deed in Lieu of Foreclosure
When pursuing a deed in lieu of foreclosure, a Cumming homeowner is hoping to avoid the foreclosure process. This process requires the homeowner to meet with the lender and hand over the keys to the house. Once the lender agrees to the process, the homeowner is released from the mortgage.
A Cumming homeowner who opts for a deed in lieu of foreclosure is being proactive. Doing so is meant to let the lender know that they cannot afford their mortgage instead of waiting for the foreclosure process to unfold. Instead of a long legal process for the lender to send all the right notifications and then wait for the homeowner to vacate the property by the deadline, the process moves quickly.
By turning over the keys on their own volition, homeowners can save the lender the money they would otherwise have to spend removing the homeowner from the house. In exchange for the upfront actions, the lender agrees to release the homeowner from the loan.
Even though the homeowner is being proactive, pursuing a deed in lieu of foreclosure will still have a negative impact on their credit score. The tradeoff, however, is that this impact is not as bad as it would be if the house were to be foreclosed on.
Deed in Lieu of Foreclosure Versus Foreclosure
The foreclosure process can be one that is drawn out and expensive. Along the way, the lender, and the property, can incur extensive costs. At the same time, the Cumming homeowners will experience damage to their credit along with the loss of the home.
All in, foreclosure can be a lose-lose for all involved. It is a bad deal for everyone. But there are times when it cannot be avoided. Divorce, medical bills, and job loss are just a few of the factors that can lead to a foreclosure.
On average, a foreclosure takes over 600 days to complete from start to finish. That’s why the lender would prefer not to go that route. The faster the lender can get the homeowner out and the house back on the Cumming market, the faster they can go back to recouping some of their lost expenses.
Making a Choice
Before deciding on what is the best path forward, it can be a good idea to speak with an attorney about your options. There are some circumstances when you could be held financially responsible for making up the difference at tax season, and it will still impact your credit.
When facing a difficult situation, Cumming homeowners will not want to delay speaking with your lender. Otherwise, they might not be able to work with you on your loan. Talking to your lender as soon as realize that you can’t make your payment is the best way to proceed. Ask questions and make sure your lender explains all of your options.
And if you need to sell your Cumming home fast, we can help. Our team specializes in working with distressed Cumming home sellers. Call us today to see what we can do.