short sale vs dil

Guest

I live in Washington state. I presume it's not an anti-deficiency state? In that case, would it be better to do a short sale or a dil if I have a choice?

I am not sure I would be approved for either as I have an okay paying job and am just now going delinquent on payments (at the quasi-suggestion of my Realtor). I owe $176,000 on the house in first and 2nd mortgages. The Realtor (and the market) suggests that the house might list for $160,000. Likely the selling price would be lower.

If I end up owing the difference to either lender, how do they get blood out of a turnip? Can they garnish my wages to the extent that I have nothing to live on?

Niicss · Posted: Thu Sep 10, 2009 3:17 am Post subject:

The state of Washington has anti-deficiency laws which prohibit the assessment of deficiency judgments against borrowers who face non-judicial foreclosure. In such a situation, I feel, it is better to go for a short sale. The deficient amount resulting from the sale would be forgiven. Moreover, your credit score would be lowered only by 75-100 points. If you go for a deed in lieu or foreclosure, your credit score will go down by 250 points.

However, as you've mentioned that there is a second mortgage on the property, you would be liable to pay it off. That won't be forgiven under the anti-deficiency laws.

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