Homeowners faced with mortgage foreclosures often opted for Deed in Lieu of Foreclosure. However, is it the best possible option for the struggling homeowner?
“Can’t we negotiate? There must be a way to work this out so we can stay in our home!” This is one of the most common questions homeowners facing foreclosure ask themselves. We will give you some answers in this post.
Some Options are Better Than Others
Some — like going through the entire foreclosure process —will leave a black mark on your credit report for probably 10 years. Others — like simply walking away from the property — aren’t necessarily wise ways of dealing with the situation either.
Sometimes you’re out of options. Short of filing for bankruptcy (which only delays the inevitable, and does not STOP foreclosure in its tracks), sometimes your lender just isn’t willing to negotiate a loan workout or accept a short sale (agreeing to take less money on the sale of your property than the balance due on their underlying mortgage).
Then again, the lender MIGHT be willing to accept a deed-in-lieu of foreclosure. Depending on how severe your financial hardship is, and other factors, the deed-in-lieu would allow you to sign over legal ownership to your home for the lender’s agreement not to foreclose.
You are in effect giving up all claims and rights to the property in exchange for the ability to walk away from it without having to make another mortgage payment — and, possibly, without a mark on your credit report.
At the very most, maybe a light gray mark instead of a black mark, if any mark at all depending on whether the lender reports your mortgage as paid in full or not. Plus, once agreeing to the deed-in-lieu, the lender will likely have to waive its rights to any deficiency judgment, which saves you from having to pay off any deficiency amount awarded the lender by a court of law. However, should you find yourself in this situation where there may be a deficiency judgment involved, the best thing to do is to consult with a real estate attorney about possible options. You should contact a real estate attorney anyway if you are considering a deed-in-lieu because it involves you giving up some legal rights. However, if you suspect mortgage fraud on your real estate transaction or feel that laws where not followed by your lender during the foreclosure process, even after the home has been sold; you can take the “BULL BY THE HORNS” using the foreclosure defense package at http://www.fightforeclosure.net for a full blown litigation to save your home from mortgage fraud.
For further details about a deed-in-lieu, the U.S. Department of Housing and Urban Development (HUD) has both a detailed fact sheet about the deed-in-lieu option and frequently asked questions about disposing of a property this way.
Bottom Line About Deed in Lieu
A deed-in-lieu is a potential way out of foreclosure for distressed homeowners who are hard pressed to find their way back to financial solvency. It may not always be the best way, but it can be much better than going all the way through the foreclosure process or filing for bankruptcy unless you can muster enough courage to fight the Bank with the all inclusive package found here at http://www.fightforeclosure.net before it is too late.
If you find yourself in an unfortunate situation of losing or about to your home to wrongful fraudulent foreclosure, and need a complete package that will help you challenge these fraudsters and save your home from foreclosure either through loan modification or “Pro Se” litigation visit: http://www.fightforeclosure.net
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