Home Loan Servicing Home Loan Servicing

Options That Allow You to Transition Out of Your Home (and Still Avoid Foreclosure)

If you are not able to keep your property, there may still be options available other than foreclosure, such as selling your home for less than the balance owed or deeding your property back to the owner of the loan, who may offer a cash relocation incentive and the possibility of a three- or twelve-month leaseback option at the current market rent rate. Some options may even offer cash incentives to help you move and transition into different housing. There may be tax consequences if the owner of your mortgage forgives any part of your outstanding loan balance or provides payment of relocation expenses. Consult your accountant or tax advisor about possible tax liability.

Please note that the result of either of these options is that you will no longer own your home.

Mortgage Release (formerly known as Deed-in-Lieu of Foreclosure and Deed-for-Lease)

Mortgage Release, also known as Deed-in-Lieu of Foreclosure and Deed-for-Lease, allows you to transfer ownership of the property to the owner of your loan and releases you from the payments and mortgage balance. Borrowers eligible to participate in the Mortgage Release program will have three options available to choose from. In some cases, relocation assistance of up to $3,000 may be available – possibly more.

  • Three-Month Transition: Remain in your home for a maximum of three months rent free after transferring your property title. This is not available for New York, Rhode Island, Massachusetts, New Hampshire, or tenant-occupied properties.
  • Twelve-Month Lease at Market Rent: Transfer your property title and then lease your home for up to 12 months. Your monthly rent is based on the current rental rates for your area—not on your original mortgage payment. This option is not available for properties in New York, Rhode Island, Massachusetts, or New Hampshire.
  • Immediate Move: Leave the property within 30 days after approval. This is available for owner- and tenant-occupied properties.

Short Sale

A short sale, also known as a pre-foreclosure sale, allows you to sell your property for less than the amount owed on your loan. If you are approved for a short sale, you can sell your home for a reduced payoff amount, and the owner of your loan may waive the remaining balance.

We will work with you and your real estate agent throughout this process. In some cases, relocation assistance may be available.

If you are interested in a short sale and have questions about the potential list price for your home, have your real estate agent go to www.homepathforshortsales.com.