Sometimes, homeowners think: “I’ll just hand the keys back and be done with it.” That’s what a deed in lieu of foreclosure is.
What’s a Deed in Lieu?
It means you voluntarily sign the home back over to the bank instead of going through foreclosure.
Why Some Homeowners Choose It
- Quick, private exit
- Less credit damage than foreclosure
- No listing or showings required
- Debt may be forgiven if negotiated
What to Watch Out For
- No relocation assistance in most cases
- Only works with a clean title (no liens)
- You must negotiate a full release of debt
- You walk away with nothing
See some common questions, such as: What is a deed in lieu of foreclosure? Can I get relocation assistance with a deed in lieu? What if I have other liens on my property? Is a deed in lieu faster than a short sale?
Bottom line: A deed in lieu can be a fast solution in simple cases, but if you want relocation help, more flexibility, or a smoother path to recovery, a short sale is usually the better option.
Want to see if deed in lieu makes sense for you? House Karma can review your loan and title and help you compare it to other options — free of charge. [Find Out Your Options →]
