Tired: can I give my house back to the bank

Worn out, just wanting to hand it back.

You’re not fighting for your home anymore. You have been for a while, and the exhaustion has run its course. You’re done and it hurts but a weight has also been lifted since deciding. Somewhere along the way the question stopped being how do I keep it and quietly became can I just hand it back and be done? There is no shame in landing here. It is not giving up, it is being honest about what you can carry. About what works for you and your family today.

You can walk away

The easiest answer is you can. You can give your home back to the bank. The formal version is called a deed-in-lieu of foreclosure and here it is simply: you voluntarily turn over ownership of your home to the lender so you don't have to go through the foreclosure process. You hand them the home instead of the home being taken or auctioned. It is a real recognized way out within loss mitigation that you can work through with your servicer, not some loophole or a last resort someone made up. People in your exact spot do this all the time. One honest piece, because I want you to picture it correctly: a deed-in-lieu transfers the home, so you do have to leave it. That is the trade. You walk away from your home, and you walk away from the weight of fighting for it.

The part you are bracing for

Here is the piece I think you already half expect. The bank does not have to accept your offer. A deed-in-lieu is something the lender agrees to, not something you can force on them, as there is no rule that requires them to say yes (12 CFR 1024.41(a)). I know how that lands because it means the clean exit isn't entirely in your hands. But hearing no on this specific path is not the door closing on you entirely. It is just this one option, and there are others that we at Transitus can show you when you're ready. So, if the bank says no, please don't read this as a verdict on you and what is possible. It isn't, there are still options. You just need to find what still works.

Before you let go, two honest checks

If you received approval from your servicer, that is truly great news. I won't talk you out of that and I'm not going to have you throw out all the work you did to receive this approval. But I'd be doing you wrong if I didn't mention a couple things that may point to a better path. If your home happens to be worth more than what you still owe, simply selling on your own terms will most likely be best for you and your family. Not only better from a financial perspective but also for your credit and future opportunities of owning a home again. So before you give it back for nothing, it is worth being sure that nothing is actually what you'd be walking away with. If this adds a greater burden I see that and we at Transitus can help you see what’s available to you to relieve that burden.

If it still makes sense that is okay. The main question that matters now is whether the deed-in-lieu covers the entire amount you owe. If it does not, a deficiency judgment could be held against you and there are lasting consequences I want you to be aware of. I know, more terms, more situations, more consequences but it’s important I share it so you have all the information you need.

A small thing that might soften the leaving

Since leaving the home is part of this, there is one thing worth knowing so it isn't all loss. People in this situation often ask their lender about help with moving costs. Sometimes this is offered through private programs like cash-for-keys. It is not promised and not every lender has it, but it exists, and it costs nothing to find out. You are giving them the home. There is no harm in asking what they can do to help you land somewhere on the way out.

You get to be done

You came here ready to set this down, and there is real dignity in knowing when it's time. You are allowed to want it to be over. It can simultaneously hurt and be the right decision. I’m sure you will pick the best path for you and that is what is most important. If there is anything we can do to help in this confusing process please reach out as we are always a communication away.

This article is general information from Transitus, not legal, financial, or tax advice. Foreclosure rules change and every situation is different. Transitus is not a foreclosure consultant (CRS 6-1-1103) and charges no upfront fees. For free help, call the Colorado Foreclosure Hotline at 1-877-601-HOPE or consult a Colorado real estate attorney.