Escrow & Title
A 'deed in lieu of foreclosure' in Texas occurs when:
AThe lender buys the property at the foreclosure sale
BThe borrower voluntarily deeds the property to the lender to avoid the foreclosure process✓ Correct
CA third party purchases the property before foreclosure
DThe court orders the property sold to pay the debt
Explanation
A deed in lieu of foreclosure is a voluntary transaction where the borrower deeds the property to the lender to satisfy the debt and avoid the formal foreclosure process. The lender must agree to accept it. It avoids the public stigma and cost of foreclosure but may not always provide a clean title if there are junior liens.
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