Is a deed in lieu of foreclosure right for me?
Program goal
A deed in lieu prevents foreclosure for borrowers who can no longer make their mortgage payments. While it will not allow you to keep your property, it will help you to avoid the public sale or auction of your house. A deed in lieu also allows you to start rebuilding your credit sooner than if you went through a foreclosure.
Eligibility
You may be eligible for a deed in lieu of foreclosure if one or more of the following apply:
you are going through a hardship (for example, a job loss, divorce or a medical emergency)
you are unable to afford your current mortgage payment
you are unable to modify your current mortgage to make it affordable
you tried to sell your property at fair market value with a licensed real estate agent for at least 90–120 days and were unsuccessful
Depending upon your loan type, when you complete a deed in lieu of foreclosure, up to $3,000 may be available for your relocation expenses. You may also be eligible for up to $6,000 to help settle obligations such as your home equity loan or line of credit. A deed in lieu effectively ends your home loan, and in some cases means you are not required to pay any remaining amount owed on your loan (also known as the deficiency).
Although a deed in lieu of foreclosure will have a negative effect on your credit, by completing this transaction you will avoid a public sale and can begin rebuilding your credit sooner.
While we work with you to complete a deed in lieu, we will continue to report the status of your account to the major credit reporting agencies. If a deed in lieu transaction is completed on your property, we will report your loan status as a deed received in lieu of foreclosure on a defaulted mortgage and resolved by acceptance of a deed in lieu of foreclosure.
To learn more about the potential impact of a deed in lieu of foreclosure on your credit, please visit the Federal Trade Commission website Opens a new window.
You should only consider a deed in lieu after you have explored all other options, including a loan modification or a short sale. Please visit our Loan Assistance Solutions page for a complete list of options you may want to consider.
Program at a glance
Step 1: Call us and we will verify that there are no other options available that would allow you to stay in your house. If you decide that a deed in lieu is the right option for you, we will connect you with a specialist who will work with you and guide you through the rest of the process.
Step 2: If you have a home equity loan or line of credit, you will need your lender’s approval to proceed with a deed in lieu. After we receive the required financial documents, and an appraiser has determined the property value and state of the title, it could be 90 calendar days before you hear back from us with a decision about whether your deed in lieu of foreclosure request has been approved.
Step 3: If your deed in lieu request is approved, and you have signed, notarized and returned all of the required documents to us, you will have 14 calendar days—or more, depending on the law in your area—to move out of the property. If you are not approved for a deed in lieu, the foreclosure process will continue.
Get more details on the steps of a deed in lieu.
How do I get started with a deed in lieu?
Before we begin
To get started with a deed in lieu, call us and we will verify that there are no other options available that would allow you to stay in your house. If you decide to go forward with a deed in lieu, you will need to provide us with:
property address
loan number
information on any foreclosure notices or dates you have received
information on any subordinate liens on the property, if applicable
information on a loan modification, if you were considered for one
letter explaining your current financial hardship (download hardship letter template)
additional documents related to your financial hardship, if requested
Let us help you
Call us today at:
1.877.430.3411
8am–10pm ET Mon–Fri
9am–5:30pm ET Sat
Call Information Sheet » Opens a new window
To help you keep track of important deadlines and take notes during the call, please print out this form prior to calling.
Now that I am in the deed in lieu process, what happens next?
If you are already in the process of a deed in lieu, we can help you understand what to do next.
I have requested a deed in lieu.
When you call to request a deed in lieu, you will be asked about your current financial situation so that we can verify that there are no other options available that would allow you to stay in your house.
If you decide to go forward with a deed in lieu, your next step will be to provide us with updated financial information and a letter explaining your financial hardship. This letter should explain the details of your hardship and why it has left you unable to make your loan payments.
There are thousands of non-profit groups and government agencies across the country ready to assist you with everything from finding rental housing or employment assistance, to saving money and more. Because these organizations are focused on the unique needs of your community, the resources you find are better able to help with your circumstances and challenges.
I have submitted all my documents.
Once we have received your documents, we will:
verify your information
order an appraisal of your house’s interior to determine the current market value
compare your property’s value to the balance on your first mortgage
perform a title search on the property to make sure there are no other liens against it.
If you have a Bank of America home equity loan or line of credit (also referred to as a second lien), we will take care of getting approvals for your deed in lieu request. If your home equity loan or line of credit is held by another lender, you must contact that lender and have them sign a Second Lien Release form, indicating their approval for you to pursue a deed in lieu. To avoid any delays, it is in your best interest to contact them right away. This process generally takes about 90 days.
The property title must be free of any liens, such as a home equity loan or home equity line of credit, when the title is transferred to us. It is your responsibility to work with other lien holders to ensure there are no outstanding liens against the property when the title is transferred.
There are thousands of non-profit groups and government agencies across the country ready to assist you with everything from finding rental housing or employment assistance, to saving money and more. Because these organizations are focused on the unique needs of your community, the resources you find are better able to help with your circumstances and challenges.
I have been approved for a deed in lieu.
Once your deed in lieu has been approved, we will send you a letter outlining the conditions, as well as documents you will need to sign and return to us. After the documents have been returned, we will prepare release documents that you will need to sign, notarize and send to us within 14 calendar days. The finalized documents will detail your decision to sign your property over to us in order to satisfy the total amount due on the first mortgage. When you have returned the release documents, you will have between 14 and 30 calendar days to relocate, depending on the law in your area.
When you move out, it is important to leave the interior and exterior of the house in good condition. All personal items, trash and debris must be removed, and the house should be free of damage.
Depending on your mortgage type and circumstances, you may be eligible for up to $3,000 in relocation assistance. You may also be eligible for up to $6,000 to help settle obligations such as your home equity loan or line of credit (also referred to as a second lien). Your specialist will make you aware of these programs, if you qualify.
Since a mortgage payment is the largest monthly expense for most households, without one your financial picture will change a great deal. Now's a good time to evaluate your budget and see how much money you'll have available for your new housing situation.
There are thousands of non-profit groups and government agencies across the country ready to assist you with everything from finding rental housing or employment assistance, to saving money and more. Because these organizations are focused on the unique needs of your community, the resources you find are better able to help with your circumstances and challenges.
Home Loan Assistance Frequently Asked Questions
No. You can work directly with us to process your deed in lieu of foreclosure.
No. A deed in lieu must be processed with the lender that holds your mortgage or the company to which you make your monthly payments.
If you have a second lien on your house (also known as a home equity loan or a home equity line of credit), you need the lender’s approval to proceed with a deed in lieu. In order to be approved for a deed in lieu, the title to the property must be clear. If your second lien is with Bank of America, we will complete your Second Lien Release form and work to get approval for your deed in lieu request. If your second lien is with another lender, you will need to contact them and request a Second Lien Release form. The lender needs to provide this form, sign it to indicate that they approve of the offer, and send it to you.
The length of time depends on your loan and circumstances. It generally takes around 90 days from the date we receive your financial documents. Once approved, you will be given 14 to 30 calendar days to relocate.
There are thousands of non-profit groups and government agencies across the country ready to assist you with everything from finding rental housing or employment assistance, to saving money and more. Because these organizations are focused on the unique needs of your community, the resources you find are better able to help with your circumstances and challenges.
