Random Thoughts

I’ve seen recent requests for information about the process of a deed-in-lieu of foreclosure.
In it’s simplest form, it’s simply the owner of a property giving the lender a deed to the property instead of the lender completing a foreclosure action. While it might seem like a good option to the homeowner who knows they can’t keep up with their payments, lenders really do not want properties signed over to them.
It is important to note that sending the lender a deed does not transfer the property title, the lender must accept the deed.

So what are the requirements for a deed in lieu?
Typical requirements will be that the property has no other loans/liens, the owner cannot afford to continue making payments, the property must be left clean, and the owner must have tried to sell the property on the open market.

Here are some links to web pages that have a little bit more information about deed in lieu from major participants in the lending industry.
Fannie Mae Loss Mitigation Policies
Hud Deed in Lieu of Foreclosure Fact sheet
VA Deed in Lieu

Policies are pretty much equivalent across the board with a few minor differences, if you have questions or comments about a deed in lieu, they can be posted here.