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When your property is worth less than what you owe and you are facing foreclosure, a short sale can be beneficial in numerous ways. A short sale can help you avoid foreclosure, protect your credit, and offer you peace of mind. Applying for a short sale may stop all foreclosure proceedings, including a sale date, if applied for with enough time in advance. During a short sale, negotiations are made with your Lender to allow you to sell your home to a third party for less than what you currently owe on the property; your Lender will take the loss and write it off.


The Deed in Lieu of Foreclosure allows you to transfer title of the property over to the Lender and be relieved of all, or most of your personal indebtedness associated with the loan. This option for avoiding foreclosure offers several advantages to both parties:

  • Avoids a formal foreclosure proceeding

  • Prevents public record filing, causing less harm to your credit record
  • Eliminates foreclosure costs and legal fees for the Lender
  • The Lender may offer incentives to vacate the property

The Deed in Lieu of Foreclosure is a solution that some homeowners choose when they're unable to make the mortgage payments on their homes. Instead of foreclosing on the house, the Lender instead accepts the Deed and full rights to the property. In return, the lender agrees he won't bring about any foreclosure proceedings, and if any have been started, the lender will end them. Additionally, the lender also forgives any additional debts on the property if the sale or house value is not enough to cover it.

The Deed in Lieu of Foreclosure can be offered by either the lender or the borrower. Most of the time, the lender offers it in the preliminary stages of the foreclosure process to save time and money. The borrower can then hand over all of the title as well as the responsibility for selling the property. The lender then records the deed with the local courthouse. Finally, the lender either sells the property or simply writes off the debt and maintains ownership of the property. 


By reinstating the loan, the homeowner simply pays the amount of the payments that are owed to the Lender in a lump-sum payment, and thereafter continues with their regular mortgage payments. Lenders often consider waiving certain fees and costs to hold a struggling homeowner, especially where the client experiences a hardship that prevents them from paying the mortgage temporarily, but later comes across a substantial amount of money (such as a new job, legal settlement, or inheritance).

The team at Home Solutions has years of experience with assisting homeowners like you in pursuing these (and other) foreclosure alternatives. We help you properly complete the application, and negotiate with your Lender to achieve the best outcome possible.

Contact us today to schedule your a free, no obligation consultation!  

You have more options than you think.