What is a Short Sale or Deed-in-lieu of Foreclosure?

In a short sale, your lender agrees to settle your loan for less than the amount you owe, by means of a sale of the house to a third party. A “deed-in-lieu” of foreclosure (DIL) means returning your property interest to the lender in exchange for your mortgage debt being forgiven. These solutions are the fallback position of a good foreclosure attorney when negotiating the terms of your mortgage.

Lenders have many reasons for agreeing to foreclosure alternatives like short sales and DIL. The biggest reason is that it is less expensive than a foreclosure. It also keeps the property from remaining unoccupied for a length of time, which becomes a financial liability for lenders.

Banks lose more money in a foreclosure because of lost interest, attorney fees, court costs, eviction expenses, selling costs, and property maintenance. The longer the process drags on, the more money the lender will lose. A short sale is faster, so the lender just gets their money sooner. This usually makes the short sale option much more attractive than foreclosure and a good foreclosure attorney can negotiate cash incentives for short sale relocation expenses.

Borrowers also benefit from a short sale or DIL by avoiding the stress and embarrassment of a foreclosure. It also prevents the credit damage of a foreclosure, so you can recover faster. Many lenders are even offering cash incentives for short sales and deeds-in-lieu options. If your foreclosure attorney negotiates well, you can get out of a troubled mortgage and back on the road to recovery with cash.

Speak to a foreclosure attorney today and find out if short sale or deed-in-lieu of foreclosure (DIL) is right for you!

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