A deed in lieu of foreclosure is typically granted when the owner is delinquent on their payments and can no longer afford to keep making them. Whether it’s a medical ailment, financial hardship, or loss of job, a change in financial circumstance has prevented them from being able to keep up with payments. If you’ve experienced a significant change in your circumstances, the developer may offer a deed in lieu of foreclosure. Some resorts and developers have a deed back program that allows you to return your timeshare. In some cases, a deed back clause is included in your contract. If you meet the conditions laid out in the clause or program, you can deed back your timeshare anytime.
Roughly summed up, a deed in lieu of timeshare foreclosure basically refers to the deal struck between the timeshare owner and the property developer whereby the property is effectively given back to the developer and therefore becomes the developer’s property once again. The developer will allow the owner to deed back their timeshare instead of the timeshare developer filing a timeshare foreclosure on the property. If accepted by the owner they sign the deed back to the developer and that ends their ownership. The debt on the timeshare loan is forgiven and you don’t have to be concerned with legal ramifications from the timeshare company.