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mcj · Joined: 12 Feb 2009 Posts: 1 1.28 Dollars($)

Would banks rather do deeds in lieu instead of short sales? If so, why aren't they trying to do that instead of sitting on these upside down properties for months and months?

jenkin7 · Posted: Fri Feb 13, 2009 2:53 am Post subject: short sale vs deed-in-lieu

Hi mcj,

A short sale and a deed-in-lieu are pretty much similar. In both cases, the creditor takes over the property and sells it in order to recover the amount the debtor owes them. However, there's a small difference between them. In a short sale, the debtor may have to pay the deficiency amount whereas in a deed-in-lieu the deficiency amount is forgiven by the creditor. Thus, I reckon, banks prefer a short sale to a deed-in-lieu. However, the banks try and avoid such measures, be it short sale or deed-in-lieu, as none of them helps the bank recover the full amount of the loan. for more details you can visit the following page:
http://www.mortgagefit.com/florida/shortsale.html

kingno1 · Joined: 25 Apr 2008 Posts: 61 21.19 Dollars($)

Well, in short sale, it is the responsibility of the owner to find a buyer, and bank has to agree for it where as in DIL, you just deed the house to bank and it is their responsibility. Most of the cases if you have 1 loan, the change that bank forgives the difference is high, unless there is a second loan and complicates things.

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Deed in lieu vs short sale