Well, this kind of return is refferd to a “Deed in Lieu of Foreclosure.” You can give the house back to the bank with a deed in lieu of foreclosure to fulfill the debt, however, you can’t sale it out.
Understanding “Deed in Lieu of Foreclosure”…
A “Deed in Lieu of Foreclosure” can be beneficial on a credit report, depending upon your perspective. The loan status will be closed and the “deed” will be recognized. As compared to the credit score of a foreclosure, a “Deed in Lieu of Foreclosure” is less harming than a foreclosure to credit reports.
One of the major benefits of the whole procedure is that it will end up in a faster mode, that too without much hassle.
Hence, if a foreclosure is expected, giving the house back to the bank is an idea that should be considered. The two greater advantages are:
- You are free from a few of the debts of your defaulted loan
- You stay away from the public scrutiny, including the legal notices and newspaper listings posted at your doorstep.
A “Deed in Lieu of Foreclosure” is not something which will save your house, but it will help you get going and recreate your life.