deed in lieu of foreclosure(redirected from Deed-in-lieu)
Also found in: Acronyms.
deed in lieu of foreclosure
An instrument transferring title to real property to a mortgage lender without the necessity of going through the foreclosure process. Called the deed in lieu (pronounced “loo”) for short, the procedure is attractive to lenders because of the speed, lack of any defenses, and removal of anxiety about last-minute borrower bankruptcy. It is attractive to borrowers because there is no foreclosure to appear on the credit records.There is some risk to the lender if there are intervening liens,because a deed in lieu transfers title to property subject to the effect of any junior liens.Usually a foreclosure destroys other liens,if they were recorded after the mortgage or deed of trust.
Deed in Lieu of Foreclosure
Deeding the property over to the lender as an alternative to having the lender foreclose on the property.
See Payment Problems/Position of the Lender/Permanent Problem.