Curious request in deed-in-lieu of foreclosure

Pay PMI provider $1K to fast-track approval?

DEAR BENNY: In a recent column you mentioned that the government in some cases is offering $1,500 to homeowners who turn over their keys and accept a deed-in-lieu instead of going through foreclosure. I can see where this is advantageous to all parties involved. How does one find out about this program?

We are getting ready to sign our deed back but of course no mention was made of giving us any monies. We left the place sparkling, with new paint, new carpet, and bought a new washer and dryer. The mortgage servicer has asked us also to sign a promissory note to the private mortgage insurance (PMI) provider for $1,000 at no interest over 18 months.

We paid PMI $60 each and every month for seven years. Is this an unusual practice? He said it would help with the lender accepting our deed-in-lieu offer, so I said OK. But now, after some thought, I think it is not wise or needed. –J.A.

DEAR J.A.: I did a website search, and found some information about the federal Home Affordable Foreclosure Alternatives (HAFA) program. Under this program, borrowers can receive $3,000 in relocation assistance when they successfully close on a short sale or a deed-in-lieu of foreclosure.