Facing foreclosure is a scary predicament. However, there are options other than foreclosure or bankruptcy to consider, one of which is deed in lieu of foreclosure. For individuals who tried and failed to secure a short sale of their home, another option is to voluntarily transfer the title to the lender in exchange for being released from the mortgage obligation. Consulting with a knowledgeable attorney can help a homeowner weigh the options and choose the one that is best.

The Szabo Law Group can assist clients in the deed in lieu of foreclosure process. It’s similar to a short sale in that the first step is obtaining a loss mitigation package from the lender. This involves filling out an application that is submitted along with documentation detailing income, expenses, most recent tax returns, bank statements, and a hardship letter. Some lenders will not accept this situation, which means the matter needs to be negotiated by a legal professional.

In some situations, the lender will recommend that the homeowner try to sell the property for 90 days before they will consider the deed in lieu of foreclosure. This also requires official documentation.

If the homeowner is approved for a deed in lieu of foreclosure, the lender will send documents for the homeowner to sign, including the deed that transfers the property to the lender and an estoppel affidavit, which sets the terms of the agreement.

While this process, which is sometimes referred to as surrender of title in lieu of foreclosure, is not a perfect scenario, it does offer advantages over short sales and most certainly over being foreclosed upon. For one, this process suggests to future lenders that you acted responsibly once you realized you would not be able to keep up with the terms of your mortgage.

Any debt left behind can come back in the future, which is another reason why it is wise to bring an attorney on board when going through the deed in lieu of foreclosure process. An attorney can negotiate the terms up front that prevents this from happening. For instance, if a homeowner owes $200,000 on a house and the bank sells the home for $180,000, the homeowner could be liable for that remaining $20,000. They must make sure the bank waives its right to pursue a deficiency judgment.

Szabo Law Group is committed to assisting individuals through their financial obstacles. Aron Szabo personally meets with every client and spends time listening and understanding every particular circumstance. The Szabo Law Group will work toward providing a solution, either through short sale, foreclosure, or deed in lieu of foreclosure. To schedule consultation contact the Szabo Law Group today at (954) 210–6054