Lenders and federal programs can help you stop home foreclosure with a deed in lieu of foreclosure
Although the economy is starting to improve, many homeowners are still finding it difficult to recover from the economic decline of recent years. If you are a struggling homeowner looking to stop home foreclosure, the deed in lieu (DIL) option may be ideal. If you have experienced a financial setback in recent years, such as job loss, death of a spouse, illness or some other hardship, you may be behind on your mortgage payments. Getting caught up on your payments is sometimes an impossible endeavor. Deed-in-lieu of foreclosure allows you give your mortgage lender possession of your home and avoid the consequences of foreclosure.
When a house goes into foreclosure, you will typically receive a Notice of Default (NOD). This gives you a short period of time to come up with the delinquent payments on the mortgage prior to the auction date set in the NOD. If you cannot make pay the delinquent payments, you may be able to sell in pre-foreclosure.
If you don’t have the time or resources for a pre-foreclosure sale, a DIL is another alternative to foreclosure. To stop foreclosure with a deed in lieu of foreclosure, you often need to talk to your lender. Lenders are not obligated to accept a DIL and may require you try other steps first. However, a DIL saves the lender time and money when compared to foreclosure.
In addition to working directly with your lender, the federal government offers DIL through its Home Affordable Foreclosure Alternatives program. Under this program, a federal housing counselor will work with you and your lender to arrange the DIL. You may also qualify for up to $3,000 in relocation assistance.
DIL may be your best option to prevent foreclosure. However, you should explore all options before you decide which is best. Reply! can help you find a qualified realtor to help you decide a pre-foreclosure sale is a better option or your lender requires you to try to sell the home first.