Monday, June 28, 2010
An interesting news article recently came out in the Seattle times about an increasingly popular way to bypass home foreclosure, deeds-in lieu. Fully named “deeds-in-lieu-of-foreclosure” (DIL) is an instrument used by borrowers to satisfy loan default, an out-of-court settlement product. How does this work? Essentially, the mortgagor (borrower) deeds the home’s title to the mortgagee (lender), relinquishing all rights in the property and releasing themselves from indebtedness. This option, which was included in Obama’s Home Affordable Foreclosure Alternative program has become more prevalent in today’s market due greatly in part to the fact that it can be done in such a quick amount of time. Other benefits include cost-saving efficiency for lenders, and less credit damage to borrowers. Bank of America is one of the largest service providers and now they are offering cash incentives to customers considering a deed-in-lieu-of-foreclosure. If you choose to take the route, remember this is completely voluntary and may not be the right choice for everyone facing foreclosure. If you have second or third mortgages or tax liens, you probably won’t get agreement. Make sure to explore and understand your options when you’re faced with foreclosure before settling with a DIL.
Posted by Sarah Hill at 1:05 PM