Deed in Lieu vs Short Sale

Deed in Lieu vs Short Sale

When pursuing foreclosure defense options, financially distressed homeowners often compare a Deed in Lieu vs Short Sale. Both options can represent great foreclosure alternatives, but not every homeowner may qualify. Homeowners should consider learning as much as possible about a Deed in Lieu vs Short Sale in order to have the best opportunity at finding approval and choosing the best option for their exact situation.

Applying for Deed in Lieu vs Short Sale

When choosing between a Deed in Lieu vs Short Sale it is important to consider the advantages and disadvantages of each option. Before deciding on an option to pursue however, it may beneficial for homeowners to learn about how to submit a loss mitigation application. Loss mitigation applications are typically required when applying for a deed in lieu or a short sale.

With either Deed in Lieu vs Short Sale, important elements to include in a loss mitigation application can be:

  • Financial documentation detailing monthly income and expenses
  • A recent W-2, pay stubs and/or other proof of income
  • Most recent tax return statement
  • Most recent bank statement for every account a homeowner owns
  • A hardship letter

Deed in Lieu vs Short Sale Benefits

A short sale typically occurs when the homeowner sells his or her home for less than the remaining balance on the mortgage. Depending upon how much equity has already been established in the home and other factors, mortgage lenders may or may not choose to accept a short sale. Some mortgage lenders may accept a short sale in order to avoid the high costs associated with moving forward with the foreclosure process. It is important to note however, mortgage lenders may choose to pursue a deficiency judgment lawsuit against homeowners after a short sale in order to uncover the unpaid mortgage balance.

A deed in lieu typically occurs when the homeowner transfers his or her title to the home for release from mortgage debt obligations. In a similar way to short sales, mortgage lenders may or may not choose to accept a deed in lieu of foreclosure based upon how much equity is in the home and other factors. Deficiency judgments lawsuits are often less common after a deed in lieu, but it can still be a consideration for homeowners to recognize in some areas.

Deed in Lieu vs Short Sale Help

For homeowners having trouble deciding between a Deed in Lieu vs Short Sale, it can be very beneficial to speak with an experienced foreclosure defense attorney. These attorneys are typically very experienced in dealing with the foreclosure process and negotiating with mortgage lenders. Foreclosure defense attorneys may review a homeowner’s situation and decide on the best fit option between Deed in Lieu vs Short Sale.