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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 debtor's voluntary conveyance of clear and valuable title of the residential or commercial property to Freddie Mac in exchange for a discharge of debt.
Getting going
If a borrower's hardship is irreversible and they're unable to be authorized for any retention options or a brief sale alternative, the Servicer must review the debtor for a deed in lieu of foreclosure, a quicker and easier procedure that makes it possible for having a hard time homeowners to leave with dignity from their homes.
The basic deed-in-lieu streamlines and improves the transaction by:
- Avoiding foreclosure.
- Providing to $7,500 in relocation support for property owners who meet specific requirements.
- Speeding up the decision-making process by handing over approval of authority to Servicers.
Borrower Eligibility
All customers are eligible for a deed-in-lieu under the following conditions:
- A debtor who does not satisfy the requirements for a structured deed in lieu of foreclosure should be experiencing or have actually experienced one of the qualified hardships noted in Single-Family Seller/Servicer Guide (Guide) Section 9202.2( a).
- The debtor needs to be able to convey clear and valuable title to the mortgaged facilities to Freddie Mac.
- The borrower isn't delinquent, hasn't obtained a brand-new mortgage in the six months preceding the customer's delinquency or, if the debtor is current in the six months preceding evaluation for a deed-in-lieu, the borrower is just allowed to have actually gotten a new mortgage if their qualified challenge was far-off work transfer.
- if the Borrower is current, in the 6 months preceding the assessment of the Borrower for a deed-in-lieu of foreclosure.
- The Borrower is only permitted to have actually acquired a brand-new Mortgage if the Borrower's qualified hardship was far-off employment transfer.
Exceptions: There are some situations where the Servicer need to send a deed-in-lieu suggestion to Freddie Mac:
- If the residential or commercial property is condemned and/or broker cost opinion (BPO) reveals that the residential or commercial property has been poorly maintained, has structural/foundation issues or needs significant repairs.
- If a customer does not satisfy eligibility requirements for a deed in lieu of foreclosure but the Servicer feels it may be the best alternative for dealing with the delinquency. The Servicer must likewise send a total Borrower Response Package (BRP).
However, unless informed by Freddie Mac, all Servicers are handed over to approve a deed in lieu of foreclosure that satisfies the eligibility requirements of Section 9209.2( a)
Borrower Documentation
Borrower paperwork is based on delinquency. Borrowers who are more than 18 months overdue ought to be assessed for a streamlined deed-in-lieu.
For additional information 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 examination hierarchy. Guide Section 9101.4: Foreclosure suspension commitments and additional short sale and deed-in-lieu of foreclosure requirements once the First Complete Borrower Response Package is received. Guide Section 9208.8: Closing, reporting, preparing and remittance requirements for brief sales and make-whole preforeclosure sales
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Helping you understand standard deed-in-lieu
Guided Answer: Deed-in-Lieu
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Freddie Mac Standard Short Sale FAQ.
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