Considerations. Before accepting the deed in lieu of foreclosure, the lender must consider many matters:
a. Value of the property vs. the amount of the debt.
b. Other debts on the property. A deed in lieu of foreclosure does not extinguish prior or junior liens or encumbrances. Thus the lender, in accepting the deed, accepts the property with the liens. It is possible for the lender to structure the deed in lieu of foreclosure so that it does not release the deed of trust so as to preserve a future foreclosure to extinguish subordinate liens.