The lender will agree to cancel the loan instead of foreclosing on your property.

I am unable to pay off my mortgage and risk losing the property through a foreclosure. Will a deed in lieu of foreclosure help me? I have a second mortgage as well.

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Is the second mortgage on the property also with the same lender? If not, the deed-in-lieu of foreclosure may not work for you.

If yes, it may. The lender will agree to cancel the loan instead of foreclosing on your property. Since you have two mortgages on the same property, the lender may sue you to recover the additional amount (if there’s any deficiency).

Bankruptcy might be another helpful option, if you want to avoid the foreclosure.


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