Length of Process for a Deed in Lieu

by Beverly Bird
A deed in lieu can help you move on more quickly.

If bad times have befallen you and you can't make your mortgage payments, you probably want to put all the stress behind you as soon as possible. A deed in lieu of foreclosure is typically quicker and less difficult than going through an entire foreclosure process. A deed in lieu allows you to convey title to your home to your lender voluntarily, and – in most cases – the lender will forgive your debt, relieving you of any obligation for the mortgage. It doesn't happen in a day, however.

Application Process

Before you apply to your lender for a deed in lieu, you'll have to spend some time gathering proof to show that you've fallen on hard times and circumstances aren't likely to change any time soon. Some lenders require that you attempt to modify your mortgage first, or list your home for sale for a few months, even if it's just to attract a short sale buyer. Although the exact requirements can vary from lender to lender, you'll probably also need copies of a couple of months' worth of bank statements, pay stubs if you're employed, and tax returns if you're self-employed. You'll also have to complete an application explaining your situation.

Home Inspection

Because your lender is taking ownership of your home, it's going to want to know what the property is worth and to ensure that it's in good condition. The lender will probably want to have a home inspection performed, as well as an appraisal. How long this may take depends on scheduling. Some lenders require that you're present at the time the inspection or appraisal takes place. You'll also have to allow time for the inspector and appraiser to prepare their reports.

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Other Liens

With some lenders, having other liens against your property is a deal breaker. They won't agree to a deed in lieu if you have a home equity loan or tax liens against the property. Others will work with you to make arrangements with other lenders to clear title. Even if there are no liens that you know of, your lender will probably want to have a title search done to be sure there's no impediment to taking title to the property, and this will take a little time as well.


Federal law has your back – it won't allow the deed in lieu process to go on interminably. The whole transaction must be completed within three months or 90 days of your application. If everything goes well and all your documentation is in order, could conceivably wrap up the whole process within 30 to 60 days after applying. You should be prepared to move out no later than the day you sign the deed, and you might have to attend the closing when title is transferred to your lender.

About the Author

Beverly Bird has been writing professionally for over 30 years. She is also a paralegal, specializing in areas of personal finance, bankruptcy and estate law. She writes as the tax expert for The Balance.

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