How to Arrange a Deed in Lieu of Foreclosure

Many people are finding themselves facing foreclosure right now. One way to avoid foreclosure to is to arrange a deed in lieu of foreclosure. In this transaction, the homeowner offers to give the lender the deed in exchange for cancellation of the debt.

Difficulty: Challenging

Instructions

Things You'll Need:

• Written offer to the lender, stating your wish to voluntarily enter a deed in lieu of foreclosure transaction
• A real estate attorney

1. Plan ahead: research this option well before foreclosure proceedings begin.

2. Find a real estate attorney to help you through the process and the paperwork.

3. Have the home appraised so that you know the fair market value of the home.

4. Offer the deed of your home to the lender in exchange for cancellation of your mortgage debt.

Tips & Warnings

• You can include a rental agreement (you pay the lender) with your offer for deed in lieu of foreclosure so that you still have a place to live.
• If the fair market value exceeds what you owe, negotiate cash consideration from the lender to make up the difference.
• Most lenders will not consider a deed in lieu of foreclosure unless you try to sell the home for 90 days first.
• Some lenders will report a deed in lieu of foreclosure as a foreclosure to the credit bureaus. Be aware of this, since the point of this transaction is to avoid this designation on your credit report.

[hanooda]

on 11/22/2007 nice job