How ‘Mortgage Release’ Works

Oct 7, 2013

Mortgage Release™ allows eligible homeowners who are delinquent on their mortgage to voluntarily transfer their home (the title and all property associated with it) to the owner of their mortgage in exchange for being “released” from their mortgage obligation. Mortgage Release may even provide a cash incentive of up to $3,000 to eligible homeowners to help with moving expenses.

The program features three options for exiting your home:

  • Leave the home immediately
  • Stay in the home for up to three months (without paying rent)
  • Stay in the home for up 12 months (paying market-rate rent)

Get Started

Should you determine that Mortgage Release is a good option for you, you should contact your mortgage company (the company that sends you monthly mortgage statements) to inform them of your interest in voluntarily transferring ownership of your home, a process also referred to as a deed–in-lieu (DIL) of foreclosure (DIL).

If you are eligible, your mortgage company will send a Conditional DIL Agreement with terms and conditions that must be met within time frames stated in the document for successful completion of the process.

After you’ve signed and returned the Conditional DIL, a title search will be ordered for your property. Any additional liens discovered during the title search must be resolved and removed in order for the Mortgage Release process to proceed. In addition, any mortgage insurance company or guarantor must approve the Mortgage Release terms.

On your agreed-upon moving date, you must vacate your property and leave it in “broom clean” condition—free of trash, damage, and personal belongings. House keys and other access devices, such as garage door openers and alarm codes, must be delivered to your mortgage company.


Your mortgage company may terminate a DIL Agreement for cause during this process. “Cause” might include your failure to complete all terms and conditions within the required time frame; changes in your financial situation; the lender determining that the transaction was undertaken in bad faith; changes in your property condition; a bankruptcy filing; or inability to obtain clear title to the property.

As an additional cautionary note, a Mortgage Release transaction may have tax consequences for you. To determine whether you will be impacted, seek advice from an accountant or tax professional.

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