deed-in-lieu of foreclosure in Canada is one alternative to going through the long, expensive, and painful foreclosure process. A deed-in-lieu of foreclosure, by definition, is when you are otherwise facing foreclosure and agree to voluntarily sign over the deed to your property to the bank. At this point you vacate the home and they are free to sell it off without having to pay court or legal costs to force you out.


A deed-in-lieu of foreclosure is not a full foreclosure. As part of this process the lender will agree to forgive any part of the loan that they cannot recoup by selling the property. At the same time, it’s much less damaging to your credit rating than a full foreclosure would be.

The main benefit of a deed-in-lieu of foreclosure is that it immediately closes the book on your mortgage. Doing it this way minimizes damage to your credit and saves you from needing to go through a foreclosure process. You also might get better terms than you would in a formal foreclosure case.

From the lender’s perspective, a deed-in-lieu of foreclosure represents a smart choice since it saves them time and money. It also helps reduce the chance (which, even if you are a fine person, is always in the back of their minds) that you will try to “take revenge” before eviction by vandalizing the property or stealing metal.

On the other hand a deed-in-lieu of foreclosure is difficult or impossible if there are more loans against the home. The second lender will almost never accept this outcome, as it usually means losing their money entirely. Similarly the primary lender will prefer a foreclosure as it cleans the title.

What If I Am Behind On My Mortgage?

If you are behind on your mortgage, the first step is to negotiate with your lender. After all, lenders prefer not to foreclosure — it’s expensive and time consuming. On the other hand they do not want to waste their time and money with risky borrowers who are always late making payments, and who might not be doing a good job maintaining the property they may want to sell.

If you cannot reach an agreement with your lender, contact us. We have helped many people who were behind on their mortgages avoid foreclosure by connecting them with alternate sources of financing, regardless of their credit score, and we have a program that will save your home and restore you to good credit at the same time.