What is meant by warranty deed in liew of foreclosure

A warranty deed transfers property and guarantees clear title. In lieu of simple means instead of. So the phrase doesn't make sense out of context. Can you provide more info?

A deed in lieu means that you as the owner of the property will sign over the property to the bank. And in return, they will not foreclose, So you as the owner will not owe them any more money like you normally do in a foreclosure.

When you do it with a warranty deed, that is merely a type of deed. They will want to be sure there are no other liens on the property, HOA, tax, 2nd mortgage and so , and in a warranty deed you are giving them a promise of a clear deed.

What financial or credit rating implications could this have if any?

First, to add a follow-up plkease use the Answer This Question options. Do not start a new thread (as you did). I've merged the threads for you.

I'm assuming that Chuck was correct and that you were offered to provide a deed in lieu of forfeiture.

What affect it will have depends on what the lender reports. If they report that you defaulted and settled, then it will have an adverse affect, but not as bad an effect as foreclosure or bankruptcy.

To help you better understand my question, my wife and I signed up for time share at westgate resor towers in Vegas, It sounded to good to be true in the beginning. We now realise that we are unable to benefit from it to its fullest potentioal and wish to get out of the agreement, settlement etc. They are willing to restructure our mortgage, they also ask that if we decide that vacation ownership is not something we wish to continue, they are willing to accept a "warranty deed in lieu of foreclosure. Should we do this we will be released from our "mortgage note" and our villa would be transferred back to Westate Resorts, including a processing fee of $250.00. How could this affect me living in Australia.
I greatly appreciate your answers and assistance.

See that presents a vastly different situation. Which is why its usually better to give a full explanation.

Time shares are sold in two ways, either deeded or contract. In a contract, you don't own the property, just a right to use it. When the contract expires so does your right to use it. In a deeded property, you actually own the property. It can be sold, left to heirs etc.

You apparently bought a deeded time share, so you were given a mortgage for the property. However, time share units are still a saleable item, especially if the resort is still in development and has an active sales force. So they have no problem taking the unit back because they have what you paid and will turn around and sell it again, maybe for a higher price.

That's why they are willing to do a deed in lieu. In this case, I doubt if it will affect your credit at all. It depends on whether you are currently in arrears and whether they will report anything to the credit bureaus. I suspect that they haven't and won't, but I would get it in writing that they won't.

I'm curious as to why you are unable to benefit from it? I just got back from a cruise last month that I took with a time share exchange.

Thank you, now that really makes a lot more sense to me now. I guess the main reason for us wanting to get out and why we believe we will not make the most of it is, we were only married not long before we signed up for the time share. We recently took out a personal loan for a brand new car for my wife, and we plan to start a family real soon!
We are also in two minds of whether we take out a mortgage to by a new house or renovate the one we currently live in. Starting a family in the very near future would mean it would be very difficult for us to travel and utilise the time share, and yes this is not limited to just Las Vegas, it can be swapped for time in any country including cruises which I am a big fan of. We have currently paid to date $4500.00 AU for this time share and still owe another $24000.00 US in order to pay it off. The repayments were over a 10 year period with monthly payments of approximately $400.00 US per month. Perhaps if we lived in the US it may have been a different story, Idont know.

When we purchased our time share, my wife liked the idea because it meant that we always had some place to go for vacation each year. Now we did purchase from a resort only about 2 hours from our home, so that makes a difference. I can also say that time share units are great for families with small children since most have some kitchen facilities.

Check to see if there is a resort near enough to you where you can exchange yearly. That might make a difference in how you feel.

But you need to make a decision that you are most comfortable with. Like I said, they got more than $4500 from you and they will turn around and resell it for the same price you paid or higher. So its no problem for them to take it back. If you do decide to deed it back, I doubt if it will have an adverse effect on your credit.

Thank you so much for your advice, suggestions and time, you have made me understand an area I had little knowledge of. I wish you the best with your time share. We will hopefully make the right decision that best suits us, no doubt based on your responses.
Once again thank you very much. Good Bless.
Tony.

Glad to assist