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Deed in Lieu

Signing your house over to your lender. If you're experiencing financial hardship and are unable to afford your mortgage payments, a deed in lieu allows you to avoid foreclosure by voluntarily transferring ownership of your property to your lender, which may satisfy the total amount due on your firs

Is a deed in lieu of foreclosure right for me?

Program goal

A deed in lieu of foreclosure, or deed in lieu, can help you avoid a public sale or auction and may also help you start rebuilding credit sooner than if you go through foreclosure.

Eligibility

You may be eligible for a deed in lieu if one or more of the following apply:

You're experiencing a financial hardship such as reduced income, medical expenses or a divorce

You're unable to afford your current mortgage payment

You're unable to modify your current mortgage to make it affordable

You tried for at least 90 to 120 days to sell your property at fair market value with the help of a licensed real estate agent, but were unsuccessful

Depending on your loan type, you may qualify for up to $3,000 for relocation expenses and up to $8,500 to help you settle other debts. A deed in lieu effectively ends your home loan, and in some cases means you're not required to pay any remaining amount owed on your loan (also known as the deficiency).

If you're not eligible for a deed in lieu, and have already explored all options to stay in your house, then normal processing of your loan will continue and may include foreclosure, subject to applicable law. If you have questions about your options, please contact us for assistance.

Now that I’m in the deed in lieu process, what happens next?

I'm interested in a deed in lieu.

First, we'll verify that there are no other options available that would allow you to keep the property.

Next, if you decide that a deed in lieu is the right option for you, we'll connect you with a specialist who'll work with you throughout the process.

To proceed with a deed in lieu, you'll need to provide:

  • The property's address
  • Your loan number
  • Information on any foreclosure notices or dates you've received
  • Information on any subordinate liens on the property, if applicable
  • Information on a loan modification, if you were considered for one
  • A hardship letter explaining your current financial difficulty

Depending on your circumstances, additional documentation may be required. If so, we'll contact you to let you know what information is needed.

If you're not eligible and have already explored all options to stay in your house, then normal processing of your loan will continue and may include foreclosure, subject to applicable law. If you have questions about your options, please contact us for assistance.

I’ve submitted all my documents.

After all required documents are received, we'll:

  • Verify your information
  • Order an appraisal of the property's interior to determine the current market value
  • Compare the property's value to the balance on your first mortgage
  • Perform a title search

The property must be free of any liens, such as a home equity loan or line of credit, when the title is transferred to us.

If you have a Bank of America home equity loan or line of credit, we'll take care of getting approvals for your deed in lieu request.

If you have a home equity loan or line of credit with another lender, you'll need to ask that lender to send us a Second Lien Release form, indicating their approval for you to pursue a deed in lieu. This process generally takes up to 90 calendar days, so to avoid delays, contact lien holders right away.

I've been approved for a deed in lieu.

If your deed in lieu request is approved, we'll send you:

  • A letter outlining the terms and conditions
  • Documents that you will need to sign and return

Once we've received those documents, we'll prepare one final set of papers, called release documents. They will detail your decision to sign the property over to us.

You must send us signed, notarized release documents within 14 calendar days.

You'll then have up to 30 calendar days to relocate, depending on the law in your area.

Depending on your loan type and circumstances, you may be eligible for up to:

  • $3,000 for relocation expenses
  • $8,500 to help you settle other debts such as your home equity loan or line of credit

Your specialist will let you know if you qualify.

If you've already explored all options to stay in your house, then normal processing of your loan will continue and may include foreclosure, subject to applicable law. If you have questions about your options, please contact us for assistance.