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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 Vermont, 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 as it allows the borrower to avoid the negative consequences of a foreclosure on their credit history and potentially absolve them from any deficiency balance if the property's value is less than the debt owed. For the lender, it provides a quicker and often less expensive way to recover the property without going through the lengthy foreclosure process. Vermont state statutes and federal laws would govern the specifics of this transaction, including any tax implications and the handling of any deficiency. It's important for both parties to obtain legal advice to ensure that the deed in lieu of foreclosure is executed properly and that all legal requirements are met.

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Real property

deed in lieu of foreclosure

Individual & Family Legal Plan

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Vermont State Code

Vermont State Code

Real property

deed in lieu of foreclosure

Articles