Loss mitigation option that helps resolve a distressed mortgage through property exit rather than keeping the home.
A non-retention option is a loss mitigation option that helps resolve a distressed mortgage through property exit rather than keeping the borrower in the home.
Non-retention option matters because some borrowers cannot or do not want to keep the property. A structured exit may reduce the damage of foreclosure, depending on the loan, investor, property, and hardship situation.
It also matters because non-retention is not the same as doing nothing. Short sale and deed in lieu options still require review, documentation, deadlines, and servicer approval.
Borrowers may encounter non-retention options during loss mitigation review after retention options are unavailable, unaffordable, or not desired. The servicer may evaluate whether a short sale, deed in lieu, or other exit path fits the file.
The term becomes practical when keeping the home is no longer realistic and the borrower is trying to avoid or reduce foreclosure consequences.
A borrower cannot afford a modified payment and has decided to move. The servicer reviews whether a short sale or deed in lieu can resolve the mortgage without completing a foreclosure sale.
Non-retention option differs from Retention Option because non-retention helps the borrower exit the property, while retention aims to keep the home.
It differs from Short Sale because short sale is one specific non-retention option.
It also differs from Deed in Lieu of Foreclosure because deed in lieu is another specific non-retention option.