The Fannie Mae program allows trouble homeowners to release their deed to the bank via the deed-in-lieu option and stay in their residence. For many, this may not sound like much of an option, but where there are few options besides foreclosure it may be preferable for a time.
The reality is that a deed-in-lieu can and will hurt your credit like a foreclosure. You may ask, “So, I get nothing out of this?” People facing foreclosure, unless they are eligible to renegotiate the conditions of their home through a loan program, will inevitably have to find gainful employment or forfeit their home. If you have exhausted every option in the foreclosure prevention arsenal—a HAMP loan modification, a short sale, the HAFA short sale (government subsidized)—a deed-in-lease will allow you to lease your residence while you get on your feet.
Preserve a sense of identity and community with a deed-in-lease
Foreclosures have been extraordinarily hard on families and communities alike. A deed-in-lease will give you the breathing room to find new work, rebuild your credit and keep your family in one place. What is more, you may even consider a service to your community and country, as many crestfallen, foreclosed-upon neighborhoods are falling into disrepair as residents leave. Though you may find it difficult to think of what has been lost in the foreclosure, you don’t lose what is really important and that is an understanding community and the place your family calls home.