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Foreclosure & Moving Expenses

by Cari Oleskewicz, studioD

When foreclosure is imminent and you've exhausted all your efforts to work with your lender to save your home, you'll need to find a new place to live. This can be an expensive undertaking, and if your financial troubles and damaged credit have led you toward foreclosure, finding a new home might be a challenge. To rent a place, you need a security deposit and at least the first month's rent, but you might be eligible for some help with those moving expenses.

HAFA Program

The Home Affordable Foreclosure Alternatives program may not have been useful if you unsuccessfully tried to negotiate a loan modification with your lender. However, other components of this federal program might benefit you, particularly when it comes to moving expenses. If you can convince your lender to allow you to pursue a short sale or bargain for a deed in lieu of foreclosure, you might be eligible for up to $3,000 to cover moving expenses.


To qualify for a reimbursement toward moving expenses, you must work with your lender to achieve a short sale or a deed in lieu of foreclosure. The property must also be your principal residence, and your first mortgage must have been originated before January 1, 2009. Your lender must participate in federal homeowner-help programs, such as HAFA, and your outstanding principal balance can't exceed $729,750. If you have trouble applying for this program or convincing your lender to avoid a foreclosure, contact the Department of Housing and Urban Development. HUD counselors are available in your community.

Short Sales

In a short sale, you sell your home for less than the amount you owe on your mortgage. This can be less time consuming and more profitable for your lender than a foreclosure. So, if you can quickly sell your home in a short sale, you can avoid the foreclosure and earn a little money toward your move. Your bank must approve the sale, close quickly and discharge any remaining debt you owe. HAFA guidelines require relocation assistance, and Bloomberg reports that some banks may offer even more to get delinquent homeowners out of the property.

Deed in Lieu of Foreclosure

When you cannot perform a successful short sale, a deed in lieu of foreclosure is your next best option to obtain funding toward your moving expenses. In this case, you sign over the deed to your property to the lender, allowing your lender to take ownership from you. Usually, deed in lieu of foreclosure is less complicated than foreclosure.

About the Author

Cari Oleskewicz is a writer and blogger who has contributed to online and print publications including "The Washington Post," "Italian Cooking and Living," "Sasee Magazine" and Pork and Gin. She is based in Tampa, Florida and holds a Bachelor of Arts in communications and journalism from Marist College.

Photo Credits

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