The current U.S. housing market and national financial crisis has caused untold stress and heartache for many American families. Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. I am often asked what is the difference between a Deed in Lieu of Foreclosure and Short Sale.
Deed in Lieu of Foreclosure
Also known as a 'friendly foreclosure', a deed in lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.
· Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.
· Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.
Short Sale
If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.
· Benefit: A short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual's public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five to seven years for a foreclosure).
· Drawback: Short sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.
Short Sale Specialist in Tacoma, Washington...
If you or someone you know in Tacoma, Washington is facing the possibility of foreclosure, you need to understand that you are not alone.
Today, 1 out of every 6 homeowners in America is behind on mortgage payments. These are tough and frustrating times. Now more than ever, it's important to identify your options. Foreclosure can be avoided, your credit can be saved, and your financial future can be salvaged.
Through my experience as a short sale specialist in Tacoma, WA, I've found that homeowners today have more questions than answers about their circumstances. I have created a site to help you understand the possible solutions to foreclosure, as well as provide a detailed explanation of short sales, which may be the best course of action for some homeowners.
Sandy Wagner
RE/MAX Professionals
http://hosted.cdpe.com/sandywagnerhomes/
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