Definition: A deed in lieu of foreclosure is a voluntary agreement in which the owner transfers the property to the lender or its designee as an alternative to completing foreclosure.
Example
A borrower and lender agree on a deed transfer and specify how the remaining loan obligation will be treated.
Keep the distinction clear
It is not simply a friendly foreclosure. The agreement must address debt release, and the transfer does not automatically eliminate junior liens or all borrower liability.
Related terms
Foreclosure · Short Sale · Deficiency Decree
Keep studying
Mortgages: Borrower, Lender, Ownership, and Key Clauses
References: CFPB: deeds in lieu of foreclosure
Pronunciation (US): deed in loo uhv for-KLOH-zher (capitals show stress)
Pronunciation reference: Merriam-Webster
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