Posted On: April 9, 2010
Shorts Sales or Deeds in Lieu of Foreclosure May Help Stop Foreclosure
A Jacksonville bankruptcy lawyer says that short sales and deeds in lieu of foreclosure are two solutions that may help distressed homeowners avoid foreclosure.A short sale is when a homeowner gets permission from their lender to sell their home for less than the outstanding loan balance. Even if the lender agrees to the short sale, they can still sue a homeowner for the deficiency – so you need the help of a Florida bankruptcy attorney to ensure you get your lender to release you from this obligation.
The benefits to a homeowner of a short sale is that you walk away from the mortgage owing nothing, and you will avoid having a foreclosure on your credit record.
A deed in lieu of foreclosure is when a homeowner gives their house to the lender in exchange for canceling the loan. The benefits are the same as a short sale – less impact on your credit record and the removal of your mortgage debt.
A short sale or deed in lieu of foreclosure usually only works when you have just one mortgage. If you have a second or third mortgage or a home equity loan, those lenders would have to agree to these solutions as well – which they have no incentive to do, since they will receive nothing.
There may also be tax consequences to a short sale or deed in lieu of foreclosure. To learn more about how to avoid Florida foreclosure, contact our Jacksonville, Florida bankruptcy law firm.
Greg Gilbert
Keith Maynard
