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Short Sale versus Deed in Lieu of Foreclosure

Posted by Loreena Yeo on November 10, 2009 at 1:14am in Short Sale Discussions

Why would a homeowner prefer to go down the short sale route instead of deed in lieu of foreclosure? It seems like in DILF, the debt may be forgiven. Please educate me.

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Replies

Wendy Rulnick November 10, 2009 at 12:51pm

Loreena - Also, DILF may NOT forgive the debt. I have been told by BOFA customers, they issue the same "reserve the right to pursue deficiency" language. And, as Bryant says, MANY benefits for future borrowing with short sale versus DILF. Example: with Fannie Mae guidelines, if no prom note or def judgment, you can get a loan IMMEDIATELY. DILF 4-7 years, restrictions with loan.
Bryant Tutas November 10, 2009 at 2:42am

Loreena, It is my understanding t hat the Deed in Lieu of Foreclosure is exactly like a foreclosure on the borrowers credit. Plus I'm not aware of these happening that often. The lender does NOT want to own real estate. It's to the lenders advantage for the property to be sold.

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