Stop Alabama home foreclosure: deed in lieu of sale as an option

Are you struggling to come up with monthly mortgage payments and fear that foreclosure may be looming in the future? You may be able to stop your Alabama home foreclosure with a Deed in Lieu of foreclosure (DIL). In this option, you transfer the title of your home back to your lender and avoid a foreclosure on your credit record.

Your lender will have guidelines you must meet to get a DIL. You may also get a DIL as one option of the Making Home Affordable (MHA) Program. If you need to exit your mortgage, you will prove your financial hardship to the lender and show that DIL is your only option to avoid foreclosure.

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If there is a strong risk that the home may end up as an Alabama foreclosure, deed in lieu typically costs less and is less hassle to the lender than a foreclosure. Additionally, a DIL causes much less damage to your credit than a foreclosure. To be eligible for a deed-in-lieu of sale, you generally need to meet the following guidelines:

• You must be going through a documentable financial hardship. This might be a job loss, a medical emergency or extended illness, or a divorce.
• You must be unable to afford the current payment on your mortgage.
• You must not be able to modify your existing mortgage to make the payment more affordable.

Some lenders will also require that your property must be listed to sell by a licensed real estate agent for at least 90 days. If you don’t get an offer for at least fair market value during that time, your lender may then allow you go get a deed in lieu. If your lender requires you try to sell, go to Reply! to find an agent near you.

Some lenders, as well as the MHA program, offer relocation money if you stop an Alabama home foreclosure with a deed in lieu. Although it should be a last resort, a deed in lieu is one alternative to foreclosure.