New Mortgage option may help lender, borrower...

According to the Colorado Springs Gazette, for the sake of both parties, the borrower and the lender, a deed in lieu of foreclosure would be a good idea for homeowners who either can't afford their mortgage payments, or decide not to pay because the value of their homes are not worth what they are paying for them.

In doing this, the borrower is basically saying that the bank owns the property once again by means of a voluntary deed. For the bank, the reason this is good is because they can avoid letting the property go into foreclosure, therefore, saving on the costs of a foreclosed house. They bank may also save time in delays, and not having to evict the present occupant of the home.

For the borrower, this is a good idea because they no longer have to be held liable for the property. So if the borrower owes money on the loan, they will not be responsible for paying what is owed as long as the bank temporarily holds ownership of the property. In the meantime, the occupant also has up to around a year where they can purchase the property back at market rental property value. There are circumstances of being able to afford this new market rent of course. Remember, a bank really doesn't want the property to go into foreclosure, because it does cost them money.

For eligible owners, they would be able to go up to 6 months paying only the cost of utilities and normal maintenance. This sounds like a win-win for both parties. So far, only borrowers in Texas, Florida, Illinois, New Jersey, Michigan, and Ohio are eligible.

So what do you think about this new move? Do you think it will be a useful procedure for the lenders of mortgages and borrowers?...