Lots of people are asking about deed-in-lieu-of-foreclosure and I am getting a lot of requests for information about it.

In reality there are very few deed-in-lieu cases that I've seen successfully pursued. Deed-in-lieu is a nice idea. The lender gets your house back. You give them the keys and you walk away. You sign over the house, and it's not your problem any more.

That may be our desire and wish, but it isn't the reality.

Deed in lieu doesn't extinguish any other liens such as junior liens on the house. In plain English, if you have a first mortgage and you also have delinquent property taxes and a delinquent second mortgage, then your first mortgage lender isn't going to want the deed back. The house would still have the second mortgage and the delinquent taxes on it. So the first mortgage lender would be getting back a house with encumbrances on it. They don't lilke that!

Also, deed-in-lieu-of-foreclosure doesn't help you much as far as your credit goes. It reads like a completed foreclosure on your credit report. So it is as bad as having lost your house in foreclosure as far as credit bureaus are concerned.

Why the attraction to deed-in-lieu if lenders don't like it, and it hurts your credit? Because people hate to lose their house in foreclosure, and feel better if they are handing their house back to someone. It feels more "right".

But there is more to the story. Because you can get your mortgage payments reduced. You can sell your house even if you owe more than it's worth. All is possible if you know how it's done. Get my 25 page insider's report, entirely free, on how to cut your payments without getting a new loan, how to slash your debts without bankruptcy, and much more.