Financial Legal Decisions to make during this process.

Deed-in-Lieu of Foreclosure - You voluntarily give the deed/title of the property to the lender or loan servicer to satisfy the defaulted mortgage and avoid foreclosure.

This is another option for you if you are deep in debt. This should be considered as a last result, especially when there isn't any money to pay the scheduled loan payments, even if the foreclosure was stopped. If you are attempting to avoid having the foreclosure on your credit report, or if the property did not or could not be sold, this may be another option for you.

What are the benefits of a Deed-in-Lieu of foreclosure?

  • It stops the foreclosure process

  • The property will not be sold at a foreclosure sale

  • Your credit is partially protected from a foreclosure sale, although your credit has already been affected by delinquent and/or default payments.

Please note that deed-in-lieu does not make you immune to the possibility of a deficiency judgment.

Take the time to negotiate your terms of a deed-in-lieu of foreclosure:

  • Will your servicer/lender cancel the mortgage note or deed of trust?

  • Are you allowed to maintain residence in the home until you find a new residence?

  • Is there a timeframe that you have to find a new home before being evicted?

  • How soon will the deed-in-lieu be reflected in your credit report?

  • Will the deficiency judgment be waived by the lender/servicer?

  • Should you consider refinancing as a means of handling default?

Give a lot of thought to analyzing your secured and unsecured debts, interest rates, balloon loan payments and up-front charges. Take time to talk to your lender and discuss the best options before deciding to refinance. This can be a very costly endeavor. Avoid predatory lenders. Make sure you are not digging a deeper hole for yourself.

NOTE: Be sure to discuss your options thoroughly with your lender or servicer. Have a complete understanding of the terms and how any one of those options may affect you and your household.

Time is of the essence, don't waste it!! If you are not pro-active, you could lose your home and your good credit rating.

For more information about AHAA's Home Retention Program contact us at 1-866-716-3633.

For more information about the U.S. Department of Housing and Urban Development go to www.hud.gov.