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Deed in Lieu of Foreclosure (Mortgage Release)

Releasing your home to Wells Fargo

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. 

Important considerations

  • 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.

See how the deed in lieu of foreclosure process works

If you're considering a deed in lieu of foreclosure, here's a step-by-step illustration showing how the process typically works, from start to finish.

Deed in lieu of foreclosure process (PDF)

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Or call 1-800-678-7986

Review the Home Affordable Foreclosure Alternatives (HAFA) eligibility matrix (PDF)

Review the Income Document Requirements for the HAMP and HAFA Programs (PDF)
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).