Sellers who are behind in payments to the lender will sometimes negotiate
with a lender to accept a Deed-in-Lieu of Foreclosure, which means the seller
has deeded the property to the lender to avoid foreclosure.
If you have had your home listed with a real estate agent for at least 30 days,
with no success in selling it, and if it is in sellable condition,
and if there are no claims or liens against it ?
Other than your mortgage, of course, you may be eligible for a "deed in lieu of foreclosure".
What this means is that you transfer the deed of your house to your lender,
so they do not have to foreclose on the property.
They obtain ownership of the property immediately,
and the remainder of your debt is sometimes forgiven.
Note that this program does not save your house.
Unfortunetly many Lenders are no longer accepting Deed In-Lieu
so we would need to contact your Lender to discuss the possibility.
When using a deed-in-lieu in order to avoid foreclosure, you need to sign legal documents
such as the Agreement in Lieu of Foreclosure and a Warranty deed, quit claim deed or a grant deed.
One document reveals the terms and conditions of the deed-in-lieu,
and is signed by both the lender and borrower.
The next document, which is the deed, conveys legal ownership of the property to the lender.
The lender marks the borrower's note as "paid" and provides the latter with two forms -
one which states that the debt is canceled and the other which refers to the waiver
of the right to a deficiency judgment (the lender's right to ask for the unpaid debt amount
if it is not recovered totally by the property-sale).
The agreement for deed-in-lieu is executed through an escrow company which receives the borrower's note from the lender. The escrow then records the deed used for transferring legal ownership of the mortgaged property and sends the note to the borrower. The borrower is thus released from the liability of the mortgage payments
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