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Reason For Deed In Lieu Denial?

by MaryAnn H.
(Newark)

Hi Foreclosure fighting team:

We are currently facing a foreclosure and received a response as denying our Deed In Lieu attempt. Do you know why this could have happened?


Stopping Foreclosure Team says:

Reasons For Deed In Lieu Denials


Hi MaryAnn,

Sorry to hear of your current situation. :-(

Many times, when a borrower is denied for a deed in lieu of foreclosure, they are not given exact reasons for this denial. If you receive such notification and you have not been told the reasons, you may want to contact your mortgage company as quickly as possible in order to see what they can tell you. This way, should there be something that is within your control to fix or change in order to have the application approved later, you will want to know this.

Of course, you may be running out of time and simply want to know why you were denied for the sheer sake of it. There are many reasons that may have lead up to your denial letter.

For starters, the mortgage lender could themselves be in such a bad spot financially that they are not able to accept ownership of any homes at this time.

If you do not have any equity in your home or it is worth too little, the bank may not deem it worthy of the time and effort to sell it themselves through a Realtor.

Sometimes, a denial could come because someone makes too much money and simply is allowing their home to enter foreclosure because they do not want it anymore. The deed in lieu of foreclosure program is supposed to be only for those who are struggling financially.

And then, there might be those reasons to which will never see the light of day. You will receive a denial letter and even after calling the mortgage company, you still may not be able to receive a clear answer.

Since the offering of a deed in lieu is not something required by law and is subject to the lenders own terms, there are many variables that may play a part, variables that you might not ever know.

Hope this sheds a bit of light for you.

Wishing you the best,
Michael
SF Team

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