A Deed-in-Lieu of Foreclosure is a transaction in which the homeowner — or a legally authorized third party — voluntarily transfers the property’s title to HUD in exchange for a release from the mortgage obligation. This can be an option when selling the property isn’t possible or preferred.

However, in many cases, waiting on a Deed-in-Lieu or Foreclosure can create delays that cause challenges for families.

• If the homeowner is still living, they may be moving into or already in assisted living and need the lien released to qualify for Medicare or Medicaid benefits. I can assist by obtaining letters from HUD confirming that the loan is non-recourse, and if the estate is insolvent, that can often help expedite the process. 
  
  

• If the homeowner is deceased, and there are assets in the Estate, Probate often requires all liens (including the reverse mortgage) to be cleared before funds can be accessed.
  

• Because Deed-in-Lieu and Foreclosure processes can take significant time, I often recommend beginning with a Short Sale, which can frequently result in a faster lien release and allow families to move forward without unnecessary delays.

If there are liens on title that cannot be cleared, HUD may ultimately require the property to proceed through Foreclosure to finalize the claim. It depends on the type of lien and if it can be wiped out in a foreclosure or not.  If it can't be wiped out through foreclosure then a short sale/heir payoff may still be eligible. EX: State tax liens, municipality liens, and federal liens cannot be wiped out through foreclosure. However, each file has to be reviewed by HUD for eligibility before approval. 

Every situation is unique, and I’m here to help you explore all available options to determine the best path for your specific needs. My goal is to help you achieve a resolution that supports both the family and the estate.