A deed-in-lieu of foreclosure, also known as a mortgage release, transfers ownership of your property to the bank and satisfies your mortgage agreement, according to FannieMae. To accomplish this, you need to review your hardship, have your property appraised, sign pre-closing documents and attend a closing.
After the deed-in-lieu of foreclosure closing, you need to leave the home. When you are required to leave the home depends on what you qualified for during the pre-closing phase, states FannieMae. The three options are to immediately vacate the home, to remain in the home rent-free for up to three months or to rent the home from the mortgage company for up to one year. When you vacate the home, it must be cleaned and your personal property must be removed.
The benefits of a deed-in-lieu include elimination of your mortgage debt, avoiding foreclosure and possible eligibility for $3,000 relocation assistance. The average time to accomplish a deed-in-lieu is 90 days, estimates FannieMae.