Ilyce Glink explains how to avoid foreclosure with a deed in lieu of foreclosure on today’s Real Estate Minute.
If you’re on time with your payments, but underwater with your mortgage, and your loan is owned by Fannie Mae (FNMA) and Freddie Mac, you may be able to walk away from your property without going through foreclosure.
Fannie Mae and Freddie Mac will let some borrowers who kept up payments as their homes lost value erase their debts by giving up the properties through a so-called deed-in-lieu of foreclosure transaction.
Non-delinquent borrowers who have experienced severe illness, job changes or other reasons they need to move will become eligible in March to apply for a deed-in-lieu.
Previous foreclosure -prevention programs were designed to help only borrowers on the verge of losing their homes, in effect penalizing those who kept paying their mortgages. Lenders hope this program will keep more homeowners from falling into foreclosure.
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