Deed-In-Lieu Process

Starting March 1st, home owners who are behind or even current on their mortgages may be eligible for a deed-in-lieu of foreclosure.  A deed-in-lieu of foreclosure is where the mortgage borrower releases all interest in the property they are mortgaging to avoid the foreclosure process.

But there are conditions that determine if you can or cannot do this according to the Federal Housing Finance Agency (whom pushed for these changes).  If you are 90 days or more delinquent on your mortgage then you may be eligible if you are also experiencing one of the following (and be able to show documented proof):

  • Unemployment
  • A hardship that has caused a reduction in income due to circumstances outside of your control (such as less hours at work)
  • A hardship that has caused an increase in housing expenses due to circumstances outside of your control
  • Divorce or legal separation, or separation of the borrowers unrelated by marriage, civil union, or similar domestic partnership
  • Death of a borrower or either the primary or secondary wage earner in the household
  • Long-term or permanent disability, or serious illness of a borrower or co-borrower or dependent family member
  • Disaster (natural or man-made) adversely impacting the property or borrower’s place of employment
  • Distant employment transfer or relocation
  • Business failure
  • Or another hardship that is not listed above

However, if you are less than 90 days delinquent or current on your mortgage you may still be eligible for the deed-in-lieu process if:

  • The death of a borrower or co-borrower
  • Long-term or permanent disability, or serious illness of a borrower or co-borrower or dependent family member

If you have any questions; please contact your agent or lender!

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