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 a home equity loan or other liens against your property.
When you’re ready to get started, here’s how the process will work:
Call 1-800-678-7986 or submit an online request to start the conversation. Your home preservation specialist will talk with you about your situation, and let you know what options might be available.
If you’re ready to move forward, we’ll send you a package with all the forms and documents you need to complete your request for assistance. Make sure you get started on these right away — we can’t begin processing your request until we have all the required documentation. Use our mortgage assistance document checklist to see what you may need to provide.
After you send your documents, we’ll review them and let you know if anything is missing. Once we have everything we need, we’ll go through all of your information to see what programs you might qualify for.
If you qualify for a deed in lieu of foreclosure, your home preservation specialist will send you the terms of the program for you to review. You must agree to transfer ownership of the property, and to leave the home by a certain date, removing all belongings and leaving the home in broom-clean, livable condition.
Depending on your situation, you may be required to try listing your home for a short sale before you can proceed with a deed-in-lieu of foreclosure.
If you agree to the deed in lieu of foreclosure, we’ll review all the required documents and terms based on guidelines from the investor who owns your loan. If everything is in place, we’ll ask the investor and/or mortgage insurance company to approve the transaction. The approval process varies, so ask your home preservation specialist what steps apply to your situation.
Keep in mind that if you have any home equity loans, lines of credit, or other liens against the property, they will be considered separately from your first mortgage transaction.
Approximate timing for this step: 30 days
A closing will be scheduled for the signing of the deed in lieu of foreclosure transfer documents. Wells Fargo will then process the payoff and close the transaction.
Approximate timing for this step: 75 days
Contact a Home Preservation Specialist at 1-800-678-7986
Start the process by filling out an online request:
Already working with us on a loan modification?
The difference between the amount still owed on a mortgage and the amount the home is sold for by the borrower (in the case of a short sale) or by Wells Fargo (in the case of a deed in lieu of foreclosure).
Review the Home Affordable Foreclosure Alternatives (HAFA) eligibility matrix (PDF*).
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Wells Fargo Bank, N.A. is required by the Fair Debt Collection Practices Act to inform you that if your loan is currently delinquent or in default, as your loan servicer, we will be attempting to collect a debt and any information obtained will be used for that purpose. However if you have received a discharge, and the loan was not reaffirmed in the bankruptcy case, we will only exercise our right as against the property and are not attempting any act to collect the discharge debt from you personally.