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Real property

deed in lieu of foreclosure

A deed in lieu of foreclosure—often referred to as a deed in lieu—is a deed by which a borrower (mortgagor) transfers fee simple title to a lender (mortgagee) to satisfy a mortgage debt.

A deed in lieu of foreclosure is a substitute for the foreclosure process and a delinquent debtor or mortgagor may avoid paying a deficiency balance (if the home is worth less than the amount owed) and may lessen the impact on their credit report by signing a deed in lieu.

In Idaho, a deed in lieu of foreclosure is a legal instrument where a borrower voluntarily transfers ownership of their property to the lender to satisfy the outstanding mortgage debt and avoid the foreclosure process. This option can be beneficial for both parties; the borrower can avoid the negative consequences of a foreclosure on their credit history and may be released from the obligation to pay any deficiency balance if the property's value is less than the debt owed. For the lender, it offers a quicker and often less expensive resolution compared to foreclosure. Idaho state statutes and federal law do not specifically regulate deeds in lieu of foreclosure, but they are governed by general real estate and contract law principles. It is important for both parties to carefully negotiate the terms of a deed in lieu agreement, and it is advisable for the borrower to seek the advice of an attorney to ensure that their rights are protected and to understand any potential tax implications.

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Real property

deed in lieu of foreclosure

Individual & Family Legal Plan

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Idaho State Code

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Real property

deed in lieu of foreclosure

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