Loss Mitigation Training

A Deed in Lieu - is the last resort to helping a homeowner avoid foreclosure.  A lender would rather do a short sale as a liquidation technique than take a property back and manage it until it is disposed, sold and off the books. In one instances it makes sense to take a property back and that is when there is equity in the property, which will allow a lender to sell the property fast. A deed in lieu allows a homeowner to surrender the property back to the mortgage company / investor and to be released of the mortgage obligations. This is only a last ditch effort and is taken only if it makes sense to the mortgage company and they are able to market the property faster.

Qualifications are that the property has been listed for sale and no reasonable offers even less than the BPO (Broker’s Price Opinion) be made. If the house is in probate the mortgage company may not want to wait for the courts. Deed in Lieu does save the mortgage company a little money in attorney fees and court costs. The property must be free and clear of any other liens and judgments.

On any loss mitigation case there must be an analysis.  Items needed in order to perform a Deed in lieu’s include:

• There has to be a verifiable hardship
• Financials have to prove homeowner cannot afford the property
• Property report / title will be pulled to verify if there are any liens or judgments
• The property must be in default in order to work a Deed in Lieu.
• Appraised value determined by exterior / interior or full appraisals to determine value
• The Unpaid principal balance is also a consideration
• Foreclosure fees
• Delinquent interest
• Auction/Sale Date
• Escrow analysis to determine if there is a deficit

All of these items are taken into consideration when processing a deed in lieu and there must be a cost savings rather than going to an auction/sheriff sale because ....

1.5 Deed in Lieu – Cash for Keys