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 Utah, a deed in lieu of foreclosure is a legal instrument where a borrower voluntarily transfers the ownership of their property to the lender to satisfy the outstanding mortgage debt and avoid the foreclosure process. This arrangement 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. Utah law generally allows for deeds in lieu of foreclosure, but the specific terms and protections for both parties may be governed by the terms of the mortgage agreement and any negotiations between the lender and borrower. It's important for both parties to carefully negotiate the terms of a deed in lieu to ensure that their rights and interests are adequately protected. Borrowers considering this option should consult with an attorney to understand the potential tax implications and ensure that the agreement includes a release of any deficiency liability.