Deed in lieu

[rosaito]

What is the name of your state? Michigan
If you do a Deed in lieu and the loan get discharged as if it was paid in full, is it true this does not affect your credit?

[pty]

Generally speaking (unless your lender is reporting it inaccurately, and most lenders are careful not to do so), a deed-in-lieu is reported to the credit bureau as a 'deed-in-lieu' and it does have a negative effect on your credit even though the account balance shows zero. You might want to ask your lender exactly how they report a DIL in order to verify that. Now, to what extent a DIL actually damages your credit, I really couldn't tell you.

You should be aware that I'm not an attorney, but I did work in mortgage servicing and processed deed-in-lieus.