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Deed in lieu of foreclosure
A Deed in Lieu of foreclosure is a deed instrument in which a borrower conveys all interest in a real property to the lender to satisfy a loan that is in default and avoid foreclosure proceedings. The advantage for the lender is the cost of acquisition is less than a foreclosure and title is gained faster. The advantage for the borrower is he avoids a foreclosure and potential deficiency judgment.
Deed in Lieu of foreclosure offers an option without a foreclosure, instead of always looking at a short sale, which requires a property to have a buyer.
In today’s tough market with adjustable rate mortgages failing in record numbers, this is an additional service and solution we can offer homeowners who have nothing else they can do. If this is your case we can help you. Ask for Help
A Deed in Lieu of foreclosure is specifically designed to allow a homeowner to give clear title back to a lender. This is allowed by a lender if a homeowner cannot afford to go forward with the payment of their mortgage.This is not done automatically by just signing a document or giving the keys back to the lenderProof must be given to the lender that a homeowner cannot afford their home.
A Deed in Lieu of foreclosure can be a Win/Win situation for both the lender and the homeowner. A lender spends many thousands of dollars to obtain a foreclosure; such as title reports, advertising, legal fees, sheriff fees, and the list goes on and on.If the property does not sell at a foreclosure option, the property must be assigned to a Realtor to sell and the fees just keep adding up, along with the fact that the lender is not receiving any monies during this time.
Should the lender (actually the investor) decide to accept a Deed in Lieu, they may be able to save a great deal of these costs, thus being able to have a clear title at a much earlier stage in the process.
Obviously, someone who has a sale date a week away cannot save the lender all of these fees. It is doubtful at this point in time that the lender would agree to this type of solution unless the homeowner has a redemption period. Redemption Period allows a homeowner to stay in their home for a period of time after a foreclosure. Every state has different rules, and it is only a short list of states that allow redemption. A homeowner can also benefit greatly from a Deed in Lieu of foreclosure. If a Deed in Lieu is accepted by the lender and clear title is achieved the lender is not able to sue the homeowner for any fee or deficiency they may not collect from the homeowner. Technically speaking this means that if a homeowner owes more on a home than a lender is able to obtain in a foreclosure sale, they can sue the homeowner for the difference. In a lot of states, when a Deficiency Judgment is allowed, the lender may sue the homeowner for this loss of funds. Sometimes a lender does not sue, but there is a "1099 with DIL foreclosure" which is an IRS form showing a capital gain on the property. Even though the homeowner does not gain any money, they did not pay the debt thus gaining from the lenders loss. You may ask about DIL of foreclosure effects. In case Deed in Lieu is signed, there are still ramifications to a homeowners credit report but it is not near as devastating as a foreclosure. Of course, the homeowner will be required to move out of their home. Many homeowners who have been foreclosed upon are finding it near impossible to find another place to live. Property managers are not allowing people to rent from them because of the foreclosure on their credit report. Some people will rent, but require six months rent as a down payment, again making it very difficult for a family to find a place to live. If a foreclosure is not on their credit report because they were able to obtain a Deed in Lieu of foreclosure, they will have a much easier time starting over with their family. Hundreds of articles are being published about this type of solution; even lenders are talking about this type of solution. We will always goes the extra mile to obtain an appropriate solution for a homeowner, so if this is the option they need, we will do everything possible to obtain this solution. Let Us Know, just Ask for Help
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Go from the Deed in Lieu of Foreclosure page to the stop foreclosure home page. Go from here to the foreclosure prevention page.
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