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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 Wyoming, 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 report and potentially absolve them from any deficiency balance—this is the remaining debt if the property's value is less than the mortgage amount. However, it's important to note that lenders are not obligated to accept a deed in lieu of foreclosure and may proceed with foreclosure if it is in their financial interest. The terms of a deed in lieu must be agreed upon by both the borrower and the lender, and it is advisable for the borrower to seek the counsel 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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Real property

deed in lieu of foreclosure

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