Contracts
A deed in lieu of foreclosure is when:
AThe lender forecloses on the property through court action
BThe borrower voluntarily deeds the property to the lender to avoid foreclosure✓ Correct
CThe buyer pays off the existing mortgage at a discount
DThe seller takes back a second mortgage
Explanation
A deed in lieu of foreclosure is a voluntary arrangement where the borrower transfers ownership of the property to the lender in exchange for release from the mortgage obligation, avoiding the formal foreclosure process.
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