Deed In Lieu of Foreclosure
A deed in lieu of foreclosure in Florida is a method used by the lien holder of a property to have the ownership interest transferred to the lien holder (the lender), to satisfy a loan that is in default and avoid foreclosure proceedings.
Florida homeowners qualify for a deed in lieu when: (1) the homeowner is at risk of default without qualifying for additional options; (2) the homeowner attempted to sell the home but was unsuccessful in doing so; and (3) the homeowner does not have another mortgage in default.
The Deed in Lieu of foreclosure in Florida is one of the four options available to the debtor. The Deed in Lieu is when the debtor has determined they must give up their property voluntarily to the lender as a result of no longer being able to afford or pay the loan installments. The lender then removes the remaining mortgage from the borrowers’ name. This process is conducted by mutual consent of the debtor and the lender. The Deed in Lieu of foreclosure in Florida is a legal deed, recorded for public record in the county court.
The deed in lieu of foreclosure in Florida has several advantages over the foreclosure process. The main advantage is that it immediately releases you from most or all of the personal indebtedness associated with your defaulted loan. You can also avoid the public notoriety of a foreclosure proceeding and may receive more generous terms than from a formal foreclosure. Another benefit to the borrower is that it affects their credit less than a foreclosure.
With a deed in lieu of foreclosure in Florida, you are able to “sell” your home back to the bank and thereby preventing a foreclosure from taking place. This is often the quickest and least expensive way to settle a foreclosure.