With a deed in lieu of foreclosure, you transfer ownership of your home to Wells Fargo Home Mortgage voluntarily, instead of through foreclosure. Depending on your situation, you may be eligible for a deed in lieu of foreclosure through the federal government’s Home Affordable Foreclosure Alternatives program, or through a different program.
How a deed in lieu of foreclosure could help
- You avoid a foreclosure sale, even if the foreclosure process has already started.
- You may be released from your obligation to repay the remaining mortgage balance.
- In most cases, you don’t have to try selling the home yourself before becoming eligible.
- It may be less damaging to your credit score than a foreclosure sale.
- In rare cases, homeowners have to pay a deficiency balance at closing or afterward. We’ll let you know if this applies to you before you commit to transferring the property.
- If you don’t have to pay the deficiency balance, you may have to report that amount as income for tax purposes. Consult your tax advisor.
- A deed in lieu of foreclosure may be more complicated if you have home equity financing or other liens against your property.