Deed in Lieu of Foreclosure

Originally written 6/19/2011

What was hard before, is still hard but manageable with patience.

Rules and regulations with most loans will generally require a house to be marketed for a period of time before a Deed in Lieu of Foreclosure (DIL) is an option in most situations.  Most homes eligible for a Deed in Lieu of Foreclosure get sold via a short sale before the bank will consider a DIL.

TIP – If you have a 2nd mortgage, you will not qualify for a Deed in Lieu of Foreclosure unless you pay off the 2nd mortgage or a release is recorded.

We are currently working on two files that should ultimately be returned to the lender on a Deed in Lieu of Foreclosure.  They did not have a 2nd mortgage and were conventional loans.

Updated 10/18/2012

DIL are becoming more acceptable to the lenders.  We have processed two files for DIL just this week.  What is the easiest loan to work with?  FHA Loans have guidelines that were established beginning in 2002.  The lenders have some ability to request exceptions to the rules via EVARS also known as “Extensions and Variances Automated Requests System.”

A Deed in Lieu is still a better option than foreclosure.