Can I Give My Lender A Deed In Lieu Of Foreclosure?

Some people are desperate. The are facing foreclosure and do not care if they keep their home or not. All they want to do is to stop foreclosure. In these case, many people want to know if they can give their lender a deed in lieu of foreclosure.

The answer is simply maybe or maybe not.

First, your mortgage lender must be willing to accept a deed in lieu of foreclosure.

Mortgage lenders are in the home loan business. They are not in the real estate business. Most people do not realize the costs that are involved when a lender gets a home through mortgage foreclosure or by a deed in lieu of foreclosure. The lender has to take care of the home, pay taxes and insurance, and then try to sell the property. While the home is on the market, the mortgage lender's money is tied up and not making money for the mortgage lender. Even if the home is sold, the mortgage lender has to pay a real estate commission and possibly other closing cost. This is a long winded way of saying that, because of the costs, your mortgage lender may not want to accept a deed in lieu of foreclosure. Your mortgage lender may prefer to see if there will be a buyer at a foreclosure sale so that your mortgage lender can avoid the costs.

Your mortgage lender may have other reasons for not being willing to accept a deed in lieu of foreclosure. There is no legal requirement for a lender to accept a deed in lieu of foreclosure. Your mortgage lender can simply refuse.

Second, if your mortgage lender is willing to accept a deed in lieu of foreclosure, you and your home must qualify. There cannot be any legal actions against you involving your home. You cannot be in bankruptcy. There cannot be any liens or judgments against you or your home. Basically, your home has to be free and clear except for the mortgage that is being foreclosed.

Finally, if your mortgage lender is willing to accept a deed in lieu of foreclosure and you qualify, be sure to have a lawyer review all of the paperwork to make sure that the deed in lieu of foreclosure completely ends the mortgage foreclosure. You do not want to deed your home to your mortgage lender and then find out that you still have some liability under your mortgage.

It is vitally important that you realize that a deed in lieu of foreclosure is one option to stop foreclosure. You may have other options to avoid foreclosure as well. So check out all options.

This article is general information. If you have any questions of any nature concerning stopping foreclosure or a deed in lieu of foreclosure, talk with a lawyer licensed in your state.

Stop! Don't blindly chase any option to stop foreclosure. See stop foreclosure options to learn what options you have in your situation. Remember, what works in one person's situation, may or may not work in your situation to stop, avoid, and prevent foreclosure. For more general information, see Stop Foreclosure - Five Options You Need To Know.

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