What is a Deed in Lieu?

Have you heard the term “Deed in Lieu“?  This term is one you may hear more often  now in our current market. Basically a Deed in Lieu takes place when a lender who is foreclosing on a property decides to allow the current homeowner to deed the property back to the lender before the foreclosure is complete. This action is actually referred to as a Deed in Lieu of Foreclosure. This can be advantageous to lenders because they get the property back sooner from homeowners which reduces their losses. This can also be  advantageous for a homeowner because this option may be less damaging to their credit.