What is the alternative to foreclosure where a borrower voluntarily transfers property title to the lender called?

The correct term for the voluntary transfer of property title from a borrower to a lender as an alternative to foreclosure is "deed in lieu of foreclosure." This option allows a borrower who is facing financial difficulties to hand over the title to the lender, which can help them avoid the lengthy and costly foreclosure process.

In this arrangement, the borrower typically seeks to mitigate damage to their credit score and may be relieved from some liability associated with the mortgage. It is beneficial for lenders as well, as receiving a property through a deed in lieu of foreclosure can be a more efficient process compared to foreclosure proceedings, allowing the lender to quickly take possession of the property and potentially resell it.

The other terms do not correspond to recognized alternatives in the context of real estate and mortgage lending. "Property relinquishment" and "title surrender" are not standard legal terms associated with this process, and "foreclosure option" suggests a potential alternative route to foreclosure rather than an alternative to it. Understanding the implications of using a deed in lieu of foreclosure is crucial for borrowers seeking to navigate financial hardships.