Facing foreclosure is a reality for many Georgia homeowners. Anyone can run into financial trouble and miss a few mortgage payments, and your situation can become especially stressful if you are trying to find a solution that will prevent you from facing foreclosure and its long-term effects. One way to avoid foreclosure is to commit to deed-in-lieu of foreclosure, but what does this option involve, and what will it mean for your home, your finances, and your situation? This post will explain Georgia’s procedures for deed-in-lieu of foreclosure so you can find the best way to avoid foreclosure on your home.
What is deed-in-lieu of foreclosure?
Deed-in-lieu of foreclosure allows a homeowner to transfer the deed of their home directly to their lender, and in turn, the lender will absolve any delinquency on the mortgage. This option offers a quick and cost-effective alternative to the traditional foreclosure process. However, it is often a last resort for homeowners who have exhausted other options to avoid foreclosure, such as remediation or loan modification. That is becasue this option will still impact the homeowner’s credit score, though less severely, and the homeowner will be forced to give up the house and any equity they have in the property.
How it works
Deed-in-lieu of foreclosure begins with the homeowner approaching their lender to see if this is a viable option for resolving their mortgage debt. The lender will then appraise the property and the homeowner’s finances to determine if this process will be an acceptable alternative to a traditional foreclosure sale. For example, if the market value of the property is roughly equivalent to the homeowner’s debt, then deed-in-lieu of foreclosure would be desirable for the lender. However, problems may arise if the home is in poor condition or the market has dipped so the property’s value is significantly less than the amount owed on the mortgage. The lender may not want to consider this option if they will have to forgive a large amount of the borrower’s debt.
However, if the lender determines that transferring the deed is the the right option, then the homeowner and lender will agree to legal terms about any debt forgiveness and officially transfer the ownership of the home.
The effects
This is often an attractive option to homeowners because it has the potential to save time and money that would be required of a traditional foreclosure sale. This process eliminates the need to pay legal fees involved with a foreclosure auction, and it also allows homeowners to avoid the long-term effects of foreclosure, such as a hit on their credit report for the following seven years. However, this process does still appear on the homeowner’s credit report, though only for four years, which can make it difficult to secure loans from other financial institutions during that time. Additionally, transferring the deed of the home often means that the homeowner will be losing their long-term investment in their property. Any equity that the homeowner has in their property in spite of the mortgage debt will be lost in this process.
Is it right for me?
The best way to know how to avoid foreclosure on your Georgia property is to be proactive and communicative. Make sure you get ahead of the problem when it becomes clear that you will not be able to make your mortgage payments on time. Reach out to your lender to explore the different options available to you for resolving your debt. Odds are, they want to avoid foreclosure as much as you do, so they will be able to help you examine your situation and find the right solution.
Here’s how we can help you!
If you have a distressed property that is danger of being foreclosed, our team can make a cash offer on that property today. Selling to us will offer the convenience of deed-in-lieu of foreclosure without the drawback of losing your home’s equity. We can make a fair cash offer on your property after only 1 showing, and if you and your lender accept that offer, we can close with a local attorney in as little as 2 weeks.
If you want to learn more about how we can help you sell your house and avoid foreclosure, we invite you to visit our How It Works page. Here, we offer full transparency about our homebuying process, including details about exactly how we calculate our offers. You can also check out Our Company page to get to know our team, our credentials, and our experience. Fill out the form below to get a no-obligation cash offer started now!