Loss Mitigation: Nonretention Options
Deed in Lieu
While MGIC prefers a short sale, we understand that there are situations where a deed in lieu of foreclosure may be the only appropriate workout option.
You have authority to offer a deed in lieu on MGIC-insured loans when the borrower has filed bankruptcy or is deceased. MGIC Delegated Guidelines must be met.
Deeds in lieu that fall outside of MGIC Delegated Guidelines must be approved by MGIC before title is transferred.
MGIC has provided full short sale and deed in lieu (DIL) delegation to Fannie Mae effective November 28, 2011. In their recent Servicing Guide Announcement, Fannie Mae instructed servicers to contact the mortgage insurers regarding reporting requirements for this delegation. At this time, MGIC has no reporting requirements for servicers on this delegation. However, as servicers implement the new MI Industry Workout Reporting Template, we do expect all short sales and DILs to be reported in that format.
If you have any questions on this delegation, please contact your Fannie Mae Portfolio Manager.
Guidelines
See section 2.07 of MGIC’s Default Servicing Guide.
Submission
Submit requests for approval and required documentation via MGIC/Link Servicing. Select Deed in Lieu in the main menu.
Support
Contact MGIC Customer Service, customer_service@mgic.com or
1.800.424.6442.
View our MGIC/Link Deed in Lieu training tutorial.