14 Options to prevent foreclosure
Deed in Lieu of Foreclosure
Get a fast loan from a private lender based on your home's equity not your credit score.
Walk Away from Your Home Without Foreclosure or Auction—Voluntarily
What Is a Deed in Lieu of Foreclosure?
A Deed in Lieu of Foreclosure is a legal agreement where you voluntarily transfer ownership of your home back to the lender to avoid foreclosure. In exchange, the lender agrees to cancel the foreclosure and release you from your mortgage debt.
This option helps homeowners avoid the public auction process and protect their dignity—while minimizing damage to their credit.
Who Should Consider a Deed in Lieu?
- Cannot afford to keep the home
- Have tried other options but were denied (modification, forbearance, sale)
- Have little to no equity in the home
- Want to avoid a public foreclosure auction
- Are willing to walk away voluntarily
- Contact your mortgage servicer and request a deed in lieu packet.
- Submit required documentation:
- Hardship letter
- Financials (income, expenses)
- Mortgage statement
- Proof you attempted a sale or short sale (in most cases)
- If approved, the lender sends a Deed in Lieu Agreement and release of liability.
- You sign over the deed to the lender and vacate the property by the agreed date.
- The lender cancels the foreclosure, and the home becomes their property.
Benefits of a Deed in Lieu
- Immediately stops foreclosure
- Releases you from your mortgage debt
- Can include “cash for keys” to help you relocate
- Avoids the stress and publicity of an auction
- Less damage to your credit than a full foreclosure
- Faster and more graceful exit than letting foreclosure happen
Considerations & Risks
- You must vacate the property by the agreed deadline
- The lender may not approve unless you first try a sale or short sale
- Will still impact your credit (usually reported as “settled for less than owed”)
- Lender has full discretion to accept or reject the request
What You’ll Need to Apply
- Mortgage statement
- Financial hardship letter
- Monthly income & expenses
- Authorization forms
- Willingness to vacate and cooperate with the process
Timeline
- Review and approval: 2–4 weeks
- Deed signing and move-out: within 7–14 days after approval
- Some lenders offer cash relocation incentives ($1,000–$5,000)
Real Example
Clarissa tried selling her home but had no offers. She was weeks from auction. We helped her submit a deed in lieu packet, and the lender approved it. She received $3,000 relocation money, moved into an apartment, and avoided foreclosure on her record.
Frequently Asked Questions
Q: Will I still owe money after a deed in lieu?
🅰️ Most lenders offer a “full release of liability,” meaning you won’t owe anything. Make sure this is stated clearly in writing.
Q: Will this hurt my credit?
🅰️ Yes, but not as severely as a foreclosure. Typically, the impact is 75–100 points less than an auction-based foreclosure.
Q: Can I apply if I’ve already received a foreclosure notice?
🅰️ Yes—but the lender must agree before the auction date. Timing is critical.
Need Help With a Deed in Lieu?
We’ve helped dozens of homeowners exit foreclosure with dignity. We’ll:
- Review your eligibility
- Help you complete and submit your packet
- Negotiate “cash for keys” offers
- Ensure the foreclosure is canceled and your debt is resolved