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A deed in lieu of foreclosure is a loss mitigation (foreclosure avoidance) alternative, along with short sales, loan adjustments, payment plans, and forbearances. Specifically, a deed in lieu is a transaction where the homeowner voluntarily moves title to the residential or commercial property to the holder of the loan (the bank) in exchange for the bank concurring not to pursue a foreclosure.
In many cases, finishing a deed in lieu will launch the borrower from all commitments and liability under the mortgage agreement and promissory note.
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How Does a Deed in Lieu of Foreclosure Work?
Deficiency Judgments Following a Deed in Lieu of Foreclosure
Mortgage Release Program Under Fannie Mae
Should You Consider Letting the Foreclosure Happen?
When to Seek Counsel
How Does a Deed in Lieu of Foreclosure Work?
The first action in obtaining a deed in lieu is for the customer to request a loss mitigation package from the loan servicer (the company that handles the loan account). The application will need to be filled out and sent together with paperwork about the debtor's income and expenses including:
- proof of income (normally 2 recent pay stubs or, if the debtor is self-employed, an earnings and loss statement).
This will delete the page "Steps to Completing a Deed in Lieu Of Foreclosure"
. Please be certain.