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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. This may release you from the obligation to repay the remaining mortgage balance.

How a deed in lieu of foreclosure could help

  • You pay no fees.
  • You may be able to avoid a foreclosure sale, even if the foreclosure process has already started. 
  • In most cases, you don't have to try selling the home yourself before becoming eligible.

Important considerations

  • In some cases, homeowners have to pay a deficiency balance at closing or afterward. A deficiency balance is the dollar difference between the mortgage balance due and the value of the property. 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 a tax professional.
  • If you have home equity financing or other liens against your property, you will need to resolve or satisfy these before a deed-in-lieu could be completed. In some situations, Wells Fargo may be able to assist in resolving this.
  • We cannot provide tax or legal advice. You should consult a tax professional and/or legal advisor about all possible implications of a deed in lieu of foreclosure.
Call 1-800-678-7986 for help with your payment issues.

Deficiency balance

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).