What is a deed-in-lieu of foreclosure?
In a deed-in-lieu of foreclosure (DIL), the borrower voluntarily transfers ownership of the mortgaged property to the servicer in full satisfaction of the total amount due on the first mortgage. The servicer’s willingness to approve and accept a DIL is contingent upon the
borrower’s ability to provide marketable title, free and clear of mortgages, liens and encumbrances. Generally, servicers require the borrower to make a good faith effort to sell the property through a short sale before agreeing to accept the DIL. However, under circumstances
acceptable to the investor, the servicer may accept a DIL without the borrower first attempting to sell the property.

Posted By: Liz Moore on Monday, November 16, 2009