Question

One reason a deed in lieu of foreclosure is attractive to some borrowers is that itA) terminates all existing liens on the property.B) minimizes the damage to the borrower's credit.C) enables the borrower to share in the proceeds when the property is sold.D) demonstrates that market conditions, not any failure of the mortgagor, are the cause of the default.

Answer 1

Minimizes the damage to the borrower's credit

Step-by-step explanation:

Foreclosure is a legal process. It is where property is sold to satisfy a default by borrower. All liens can be enforced by the sale.

Deed in lieu of foreclosure is simply a given deed by a mortgagor to the mortgagee.

It is given usually when the mortgagor is in default under the terms of the mortgage and it can avoids foreclosure but does not remove liens from the property. It is when defaulted borrower gives or deeds property to lender to escape or avoid foreclosure.