What stage of foreclosure are you in?
In most states the start of foreclosure is when the homeowner is 90 day late or past due. This will trigger the bank to file a Notice of Default (NOD) on your home. The (NOD) will be mailed to you and recorded with the county recorders office. This is the beginning of the foreclosure process, also called pre-foreclosure.
How is Deed in Lieu different from Foreclosure? The main difference between foreclosure and deed in lieu is how the process takes place. In a Deed in Lieu the homeowner signs over the title to the bank allowing the bank to take full ownership of the property. In a foreclosure the same thing takes place except the bank is forced to go by the step-by-step process determined by laws in your state.
Does the Bank Profit from a Deed in Lieu? The bank does not necessarily make money from doing a Deed In Lieu, but does however save a ton. The foreclosure process can cost the bank upwards of $50,000 through completion. This being said they are not making money, but drastically saving it.
How will Deed in Lieu and Foreclosure affect me?
Both Deed In Lieu and Foreclosure will affect you in the same exact way. You will not be eligible for a Fannie Mae insured loan for 5-7 years. Your credit will be negatively affected to the tune of 200-300 points.