Stop Michigan Foreclosure

Deed in Lieu of Foreclosure – Seriously?

In the last few months here in Michigan, we noticed a growing trend with lenders. In the case of defaulted loans, they seem to be aggressively pursuing the sellers in an effort to get them to sign a deed-in-lieu of foreclosure. Seems like they might be trying to by-pass the new government programs, they’re getting tired of waiting out the Michigan six redemption period, or maybe they’re just trying to protect the property to recoup their losses in a quick resale situation. Whatever the reason, deeds-in-lieu are increasing in popularity around here.

Now at first a deed-in-lieu might sound appealing. Your lender might offer you a few thousand dollars to vacate and clean up the house and sign the house over to them. After all, you’ve missed a few payments and you’re pretty sure you can’t afford to keep it no matter what sort of payment plan they present to you. They’re offering to take care of the house for you AND give you some cash to move. Sounds pretty good right? Almost too good to be true? Well that’s because it is – it IS too good to be true, in most cases.

A deed-in-lieu is just legalese for a voluntary foreclosure. And on your credit report, it shows up as the same thing. Foreclosures can stay on your record for up to 15 years! This means it will inhibit your buying a new home or any other major purchase for a decade and a half. Even worse is that this deed-in-lieu will likely NOT waive your responsibility to pay back the full balance of the loan. So they expect you to hand over the keys, and then still pay them tens of thousands of dollars in the years to come?

Now that measly thousand dollars isn’t looking so good is it? Not when you think of the long-term effects.

If you’re not quite ready to agree to such a permanent outcome and want to know what other options might be available to you when you are facing a Michigan Foreclosure, including some that won’t further damage your credit or leaving you owing the bank tens of thousands long after you’ve left the house, give Emily a call today.

Melissa