Deeds in Lieu of Foreclosure: Naughty or Nice?

Reviled by some as a new way of painting over the fissures of distress still spidered throughout the foundation of the recent housing recovery; revered by others as a less disruptive solution than foreclosure for homeowners in trouble.

A deed in lieu of foreclosure allows a lender to take possession of a property securing a delinquent loan without going through the increasingly messy and costly foreclosure process. It allows a homeowner to walk out from under a mountain of debt without a full-fledged foreclosure on their credit history — although of course the end result is the same: they lose ownership of the home.

But as the foreclosure process has become more difficult, lengthy and less politically correct, lenders are turning to more PR-friendly alternatives to divest distressed homeowners of their homes. Thus far the primary alternative in the arsenal of lenders that has gained traction is short sales.

TransUnion said today that the serious mortgage delinquency rate is heading downhill at a quickening pace, however long term delinquencies and the slow process of resolving them are impeding a return to more normal rates.   According to year-end data from the credit reporting company, the rate of serious delinquencies - 60 days or more - fell 14 percent in 2012 compared to 7% in 2010 and 6% in 2011.  By contrast, when rates were rising, from 2007 to 2009, they increased by at least 50 percent each year.

The final quarter of 2013 was the fourth consecutive one in which the 60+ day rate declined, dropping from 6.01 percent in Q4 2011 to 5.19 percent in Q4 2012.  The rate was 5.41 percent at the end of Q3 2012.  TransUnion expects the mortgage delinquency rate to continue its downward trend in the first quarter of 2013, though it will likely remain above 5%.

But inside observers who shared their experience with The Huffington Post and other regulatory experts familiar with the process said that the decision to scrap the reviews was also a tacit admission that the program, which had cost billions of dollars and one year of intense work, was too broken to save.  Had the reviews continued, insiders note, they would have produced results compromised by systemic mistakes and errors made along the way by the contract employees at banks and at the auditors.

The purchase of a property is a major event.  Many buyers have an idea of playing house and search for a dream home and once the sale is final experience a common feeling called buyers remorse.  Sometimes this is simply a feeling, other times homeowners discover issues with a property after a purchase that should have been discovered prior to contract that would have swayed them to another property, now there is not a simple way out.  Here are a few tips to consider when planning to purchase a new home or property to prevent yourself from experiencing buyers remorse.

• Stay focused on the long view
• Make sure you know what you're getting
• Do a walk-through and prepare for closing
• Know who/what's coming at the closing and to be prepared for the unexpected
• Factor-in ongoing expenses

Your best plan for preparation is to think realistically about the true cost and impact of homeownership on your life.

In today’s real estate environment, the importance of title insurance has become very clear.The possibility of courts overturning the proceedings involving foreclosed on homeowners,have many banks evaluating their processes around foreclosures as well as other home loan transactions. The availability of title insurance plays a pivotal role in making mortgage products available to the consumer. Without it, the mortgage industry grinds to a halt. But what is title insurance?