WA – Many people ask if they should do a deed-in-lieu of foreclosure and give their house back to their lender. A deed-in-lieu does have its benefits. Lenders like them because they speed up the foreclosure.
A deed-in-lieu is the equivalent to a “No Contest” plea in a criminal trial. You just give up on the foreclosure. If there is a foreclosure court case, the judge will still have to schedule a foreclosure sale.
Contrary to popular opinion, a deed-in-lieu does not automatically release you from the debt. This means that your lender could be pursuing you five years later, after you get back on your feet.
There is an application process. You will have to spend between 5 and 10 hours submitting paperwork to your lender before they will approve the deed-in-lieu. Yes, I think it’s crazy!
Why should you have to submit paperwork to make it easier for your lender to foreclose on your house? Doesn’t make any sense. That is why I recommend a short sale instead of a deed-in-lieu.
You get to avoid the humiliation of a foreclosure. In addition, most short sales allow you to stay in the home rent free for 3-6 months. And you can get up to $3,000 from HAFA.
That will help cover the cost to move and maybe even cover the deposit on a rental property. The other advantage with a short sale is that you will be able to buy another home sooner.
Because a deed-in-lieu acts as a foreclosure, you will not be eligible for a new mortgage for 5-7 years. With a short sale, you can be eligible to buy another house in 2 years.
Thinking about a short sale? I can help you short sale your property and never pay the bank another penny. Send me an e-mail at firstname.lastname@example.org. I will contact you for a free consultation.
When we talk, I will explain how the process works in detail. If you prefer, then you can call me at 1-800-LISTING.
Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.
Thinking about a loan modification? Our Loan Modification Kit has the instructions you will need to get a loan modification approved with your lender. Click here to request a copy.
Thanks for reading this,
Jonathan is a Managing Real Estate Broker at Phillips Realty LLC.
Jonathan Phillips specializes in loan modification assistance and short sales in Pierce County Washington. Pierce County Loan Modification Help, Pierce County Short Sales, Pierce County Short Sale Realtor. Short Sale Realtor. WA Short Sales. Realtor.
Copyright 2010 SFI Marketing Institute, LLC. All Rights Reserved. This is not intended as legal, technical, or tax advice. Please speak with a licensed professional before making any decision. Information is deemed reliable but not guaranteed as of the date of writing. The views expressed here are Phillips’s personal views and do not reflect the views of Phillips Realty LLC. This information on Short Sales: Walk Away or Stay? is provided as a courtesy to our viewers to help them make informed decisions.