‘Deeds-in-lieu’ becoming popular foreclosure alternative
Short sales and loan modifications have grown to help offset foreclosures, but banks are also turning more to deeds-in-lieu of foreclosure.
Slightly more than 20,000 deeds-in-lieu of foreclosure occurred nationwide in 2012, which is up nearly 40 percent from 2011, according to RealtyTrac.
Some states are even seeing larger increases with some up by as much as as 76 percent.
Deeds-in-lieu of foreclosure permit a lender to take possession of a home without having to undergo the foreclosure process. The home owner is allowed to leave their mortgage debt and avoid foreclosure by turning over the home to the bank.
A deed- in-lieu of foreclosure often offers “cash for keys,” providing a cash payment to the distressed homeowner in order for them to vacate the home, without letting the home fall into foreclosure.