Private Money Lender Seeking Advice RE: Deed In Lieu

[Sunny Shakhawala]

Hey Everyone,

About to originate a new loan for one of my borrowers. I've never used a deed-in-lieu of foreclosure before, but a few friends have told me to include it in my packet. 

Question: If I have the borrower's sign a deed-in-lieu before closing the loan, what would trigger my ability to exercise it? Or am I able to exercise it at any point? That hardly seems fair.. I mostly see the value of a Deed In Lieu if the borrower's sign it in advance (before getting themselves into trouble). I doubt any borrower would sign it after they have my money...

Can someone explain to me the correct way to document it? Does anyone have a template I can use?

Are there any borrowers here that have signed a DIL for a Private / Hard Money Lender at or before closing? If so, would love to see it. 

TIA.