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 This is the concluding article of three part series about Las Vegas, Nevada short sales and foreclosure process which was presented in a class by Scott Gillespie who is a mortgage planner with First Horizon Home Loans. This is the concluding part.

Deed in Lieu

Deed in Lie. First let me say from a lending perspective a deed in lieu is treated for credit purposes pretty much the same as a foreclosure. The credit report will be damaged just the same and when coming back to qualify for a new mortgage, a borrower will have to wait at least three years from the date the property went back into the bank’s name.

So why do a deed in lieu? The main advantage to a borrower is that it immediately releases the borrower from most if not all of the personal indebtedness on the property.

As we discussed before, for credit purposes the date of the foreclosure is the date the bank’s name goes onto the title. With a deed in lieu this date is expedited by months, possible over a year, as the normal foreclosure process can drag on. This of course translates into a quicker recovery time of the borrower’s credit.

The key to negotiating a deed in lieu is that the bank agrees and the transaction is both voluntary and in good faith. Why would the bank not agree? Possibly because in analyzing your financial position they feel you have the funds to continue paying the mortgage or because the property value does not cover the indebtedness against the property.

That’s a very common situation here in Las Vegas making this a very difficult option to accomplish. To initiate a deed in lieu a borrower must submit in writing to the lender a letter that specifically state the offer to give back the property is being made voluntarily. This is important as it enacts the parole of evidence rule that protects the lender from later claims that they pressured the borrower to give the property back.

Bottom Line: If you are faced with the reality that you can no longer pay your mortgage this is definitely an option to consider because of the advantage of both a quicker recovery time on the credit and the release of liability from any further loss the bank may realize on the property.

Related web-site links:   Las Vegas, Nevada Homes and Condos for Sale, Short Sales, Foreclosures, HUD Homes and Fixer-uppers, getting the best deal for a Las Vegas home or condo