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Deed-in-Lieu
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What is a Deed-in-Lieu?
A deed-in-lieu (" deed in lieu of foreclosure") is a customer's voluntary conveyance of clear and marketable title of the residential or commercial property to Freddie Mac in for a discharge of financial obligation.
Beginning
If a debtor's challenge is irreversible and they're unable to be authorized for any retention choices or a short sale alternative, the Servicer ought to review the debtor for a deed in lieu of foreclosure, a much faster and easier process that makes it possible for struggling house owners to exit gracefully from their homes.
The standard deed-in-lieu streamlines and streamlines the deal by:
- Avoiding foreclosure.
- Providing to $7,500 in relocation help for house owners who satisfy particular requirements.
- Speeding up the decision-making process by handing over approval of authority to Servicers.
Borrower Eligibility
All borrowers are eligible for a deed-in-lieu under the list below conditions:
- A debtor who doesn't meet the requirements for a structured deed in lieu of foreclosure should be experiencing or have actually experienced among the qualified difficulties noted in Single-Family Seller/Servicer Guide (Guide) Section 9202.2( a).
- The debtor should be able to convey clear and marketable title to the mortgaged properties to Freddie Mac.
- The debtor isn't delinquent, hasn't acquired a brand-new mortgage in the six months preceding the customer's delinquency or, if the debtor is present in the 6 months preceding examination for a deed-in-lieu, the customer is just permitted to have gotten a new mortgage if their qualified difficulty was far-off work transfer.
- if the Borrower is present, in the 6 months preceding the assessment of the Borrower for a deed-in-lieu of foreclosure.
- The Borrower is only allowed to have actually acquired a brand-new Mortgage if the Borrower's qualified challenge was far-off work transfer.
Exceptions: There are some scenarios where the Servicer ought to send a deed-in-lieu suggestion to Freddie Mac:
- If the residential or commercial property is condemned and/or broker cost viewpoint (BPO) shows that the residential or commercial property has actually been inadequately kept, has structural/foundation problems or needs major repair work.
- If a borrower doesn't fulfill eligibility requirements for a deed in lieu of foreclosure however the Servicer feels it might be the finest choice for addressing the delinquency. The Servicer must likewise submit a total Borrower Response Package (BRP).
However, unless notified by Freddie Mac, all Servicers are entrusted to approve a deed in lieu of foreclosure that fulfills the eligibility requirements of Section 9209.2( a)
Borrower Documentation
Borrower documentation is based on delinquency. Borrowers who are more than 18 months delinquent need to be evaluated for a structured deed-in-lieu.
To find out more about deeds-in-lieu, describe Chapter 9209.
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Guide and policy
Guided Answer: Deed-in-Lieu.
Guide Section 9201.2: Freddie Mac loss mitigation assessment hierarchy.
Guide Section 9101.4: Foreclosure suspension obligations and extra short sale and deed-in-lieu of foreclosure requirements once the First Complete Borrower Response Package is gotten.
Guide Section 9208.8: Closing, reporting, preparing and remittance requirements for brief sales and make-whole preforeclosure sales
Factsheets and lists
Home Affordable Foreclosure Alternatives (HAFA).
Foreclosure Sale Bidding Instructions
Helping you comprehend standard deed-in-lieu
Guided Answer: Deed-in-Lieu
Related resources and help
Freddie Mac Standard Short Sale FAQ.
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