[Logo: Homes and Communities: U.S. Department of Housing and Urban Development]
[Vea la versión en español de esta página] [Contact Us] [Display the text version of this page] [Search/Index]
 

Housing
About Housing
Contact us
Keywords
 - Single Family
 - - Audience groups
 - - Buying a home
 - - Events & training
 - - FHA insured loans
 - - Common questions
 - - Housing counseling
 - - HUD homes/ REO
 - - Owning a home
 - - Reference guide
ORAMH
Hospitals
Multifamily
OAHP
Reading room
Online forums
Work online

HUD news

Homes

Resources

Communities

Working with HUD

Tools
Webcasts
Mailing lists
RSS Feeds
Help

[The U.S. government's official web portal]  

Deed-in-Lieu
Frequently Asked Questions

- -
 Information by State
 Print version
 
-
Related Information
-
 -   Loss Mitigation Policy & Guidance
 -   NSC FAQ Table of Contents
 -   Servicing Guidance

A Deed in Lieu of foreclosure (DIL) is a disposition option in which a mortgagor voluntarily deeds collateral property in exchange for a release from all obligations under the mortgage. A DIL of foreclosure may not be accepted from mortgagors who can financially make their mortgage payments.

Question 1: When a mortgagor has been approved for utilizing a DIL of foreclosure, how much time does a mortgagee have to complete the DIL?

Answer: A DIL of foreclosure must be completed within 90 days of initiation of the process.

Question 2: Does HUD allow $2,000 to pay off second liens when determining if a mortgagor is eligible for a DIL?

Answer: Yes, effective with Mortgagee Letter 2002-13, HUD increased the mortgagor's DIL of foreclosure consideration to not exceed $2,000. The funds may be used to pay off junior liens or be paid to the mortgagor upon vacating the property.

Question 3: Can a mortgagee revert from a foreclosure process to the acceptance of a DIL from a mortgagor?

Answer: This is a business decision the mortgagee is to decide based upon what is stated in the mortgagee's Quality Control Plan.

Question 4: Does a mortgagee have the ability to accept a DIL of foreclosure when there is an existing Partial Claim?

Answer: Yes, Mortgagee Letter 2000-05, page 37, paragraph E. Condition of Title, states, "Good and marketable title must be conveyed to the Secretary. The lender must complete a title search and may be required to secure release of junior liens and/or endorsements to the title policy. HUD will not accept title subject to most junior liens including IRS liens. However, HUD will allow liens securing repayment of Section 235 assistance payments, partial claim advances and Title I liens."

 

 
Content current as of 15 May 2009   Follow this link to go  Back to top   

----------
FOIA Privacy Web Policies and Important Links  Home [logo: Fair Housing and Equal Opportunity]
[Logo: HUD seal] U.S. Department of Housing and Urban Development
451 7th Street S.W., Washington, DC 20410
Telephone: (202) 708-1112   TTY: (202) 708-1455
Find the address of a HUD office near you