A Deed in Lieu of foreclosure (DIL) is a disposition option in which a mortgagor (or a property owner subject to a deed of trust) voluntarily deeds the subject property to the lender in exchange for a release from all obligations under the mortgage. (In California this may be a presumption but make sure you work with an attorney to ensure that this presumption works for you.) A DIL of foreclosure might not be accepted from mortgagors who can financially make their mortgage payments. Which is why you want to work with an experienced attorney when preparing your workout package. QUESTION 1 – When a mortgagor has been approved for utilizing a DIL of foreclosure, how much time does a mortgagee have to complete the DIL?
QUESTION 2 – Does HUD allow $2,000 to pay off second liens when determining if a mortgagor is eligible for a DIL? (this is very important to know and we have utilized this option. Many so called experts say you can’t use a Deed in lieu of foreclosure if you have two mortgages. )
QUESTION 3 – What is HUD’s process for acceptance of a DIL of foreclosure on an asset that is “structurally damaged?”
QUESTION 4 – Can a mortgagee revert from a foreclosure process to the acceptance of a DIL from a mortgagor?
QUESTION 5 – Does a mortgagee have the ability to accept a DIL of foreclosure when there is an existing Partial Claim?