What is a deed-in-lieu of foreclosure ?

Let’s learn about a “deed-in-lieu of foreclosure?”

A deed-in-lieu of foreclosure means that, in order to be released from your mortgage, you must transfer ownership of your home to your lender. If you choose this option, a U.S. Department of Housing and Urban Development (HUD)-approved housing counselor can help you plan your next steps.

Borrowers who are considering a deed-in-lieu of foreclosure should also ask their lenders or servicers about help with their relocation expenses, either under the federal government’s Home Affordable Foreclosure Alternatives Program (HAMP) or other private programs that are sometimes called “cash-for-keys.”

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Deed in Lieu of Foreclosure Law & Legal Definition

A deed in lieu of foreclosure is a method sometimes used by a lienholder on property to avoid a lengthy and expensive foreclosure process, With a deed in lieu of foreclosure (DIL), a foreclosing lienholder agrees to have the ownership interest transferred to the bank/lienholder as payment in full. The debtor basically deeds the property to the bank instead of them paying for foreclosure procedings. Therefore, if a debtor fails to make mortgage payments and the bank is about to foreclose on the property, the deed in lieu of foreclosure is an option that chooses to give the bank ownership of the property rather than having the bank use the legal process of foreclosure.

A Deed in Lieu can be used in limited circumstances. The debtor must have exhausted all efforts to sell the home professionally marketed at it’s as-is, fair market value. The debtor also can’t have another mortgage in default and must not have the ability to make the monthly payment or make up the difference between the sale price and what is owed.

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There is HOPE when it comes to loan modifications.  There will be some work involved including gathering supporting documents and  some time to gather your information so they counselors can speak to your bank or Lender on your behalf.

So if your looking for some assistance with your current mortgage or just have questions, contact us now.  This service is always free of charge, and you could have a counselor talking to your bank in less than 5 days.  We wish you the best of luck, and remember we know from experience that people who put in the work are the ones who typically get modified.

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