Also known as a 'friendly foreclosure', a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must vacate the property.  Property owners should consult with their tax advisor regarding potential tax consequences of transferring title via a Deed in Lieu.

To initiate a Deed in Lieu of Foreclosure, the homeowner should contact their mortgage lender’s customer service department and ask if a loan modification is an option. 

The lender will want to review the homeowners overall financial status to determine that they are unable to continue making the mortgage payment.  For a sample of the types of documentation a lender is likely to request, click on the “Preparing Your Financial Statement” tab.

The lender is likely to also require documentation to determine the current home value and may want to visit the property to determine its condition.  Guarantee Real Estate Sales Associates are able to create a report that shows recent closed, pending, and active sales in your neighborhood and determine a reasonable value for your home.  There is no fee for this service.  Please contact us if you would like one of our Guarantee Short Sale Specialist (GSSS) agents to make an appointment with you to determine the value of your property.

• Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.

• Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.  Sometimes there are taxes due on the loan forgiveness, property owners should meet with their tax advisor regarding this issue.

IMPORTANT NOTICE: Guarantee Real Estate is a real estate broker. The service we provide is to assist in the sale or purchase of real property.  We do not negotiate with lenders in an effort to modify mortgages.  It is strongly recommended that you seek appropriate professional tax or legal counsel regarding the transfer of real estate.  Guarantee Real Estate is not associated with the government and our service is not approved by the government or your lender.  Even if you use our service, your lender may not agree to change your loan.  If your home is listed for sale, please do not consider this as a solicitation to list your property..