Deed in Lieu
Deed in lieu is a process used in foreclosure proceedings. By transferring the deed to their house to the lender, Borrowers can hand over the keys and walk away from their property. The homeowner loses all monies invested in the property and receives no sale proceeds. It is a drastic measure which should be considered only after all other options are exhausted.
Banks are not obligated to offer deed in lieu of foreclosure. Instead, it is a mutual agreement that can benefit both parties. Lenders can avoid the expense of costly court battles and homeowners can avoid the stress of the foreclosure process. In many ways, it is a less painful way to lose your home. However, deed in lieu causes substantial damage to your credit that can takes years to overcome.
Certain eligibility requirements must be met before deed in lieu is offered. The house must be the Borrower's primary residence. During deed in lieu of foreclosure negotiations, the Borrower is not allowed to vacate the property or leave it empty. Mortgage payments must be delinquent by a minimum of 31 days.
Mortgage delinquency caused by the death of a spouse, loss of employment, job transfer or divorce is looked upon more favorably than delinquency caused by frivolous spending habits.
In most cases, people undergoing the foreclosure process work with an assigned Loss Mitigator. It is important to realize bank loss mitigators are overwhelmed with work. With the massive influx of foreclosures, and more on the way, it's not uncommon for mitigators to handle caseloads for hundreds of anxious and stressed-out homeowners.
Experts recommend being organized and providing requested information in a timely fashion. Not only will you expedite the handling of your case, your loss mitigator will be more apt to help you obtain a deed in lieu.
Loss mitigators are not responsible for making final decisions regarding loan modifications, short sales or deed in lieu of foreclosure. Instead, they negotiate with lenders and strive to obtain a win-win situation for all parties involved.
By the time deed in lieu is offered, loss mitigators have exhausted all options to save the home from foreclosure. Once Deed in Lieu papers are signed; the lender takes immediate possession of the house.
One oftentimes overlooked alternative is to sell the property to a private real estate investor. In some instances, banks will authorize a short sale; allowing the Borrower to sell their home for less than is owed on the mortgage note.
If you are facing foreclosure, contact Simon Volkov to discuss available options today. As a private investor, Simon specializes in purchasing distressed properties and helping people quickly liquidate assets.