Bountiful Short Sales: Deed-In-Lieu of Foreclosure or Short Sale?

Bountiful UTAH - Many clients have asked us if they should do a deed-in-lieu of foreclosure and just give their house back to their lender. While this may seem somewhat extreme and without rationale, a deed-in-lieu does have its benefits. Lenders like them because they speed up the foreclosure.


A deed-in-lieu in a nutshell is like entering a “No Contest” plea in a criminal trial. You just give up on the foreclosure. If there is a foreclosure court case, the judge will still have to schedule a foreclosure sale.

Contrary to popular opinion, a deed-in-lieu does NOT automatically release you from the debt or deficiency.  This means that your lender could be pursuing you five years later, after you get back on your feet.

There is an application process. You will have to spend between 5 and 10 hours of your time submitting paperwork to your lender before they will approve the deed-in-lieu. Yes, it is completely insane!

Why should you have to submit paperwork to make it easier for your lender to foreclose on your house?  It simply does not make any sense. That is why I personally would recommend a short sale instead of a deed-in-lieu.

You get to avoid the humiliation and long term problems of a foreclosure on your credit report. In addition, most short sales allow you to stay in the home rent free for 3-6 months. And you can get up to $3,000 from the HAFA program.

That will help cover the cost to move and maybe even cover the deposit on a rental property. The other advantage with a short sale is that you will be able to buy another home sooner.  Because a deed-in-lieu acts as a foreclosure, you will not be eligible for a new mortgage for 5-7 years. With a short sale, you can be eligible to buy another house in as little as 2 years.

Thinking about a short sale? I can help you short sale your property and never pay the bank another dime. Send me an e-mail at utahhomesaver@gmail.com. I will contact you for a free consultation.  When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call Dave at 801-651-0707.

Thinking about a loan modification? Our Utah Home Saver Loan Modification Kit has the instructions you will need to get a loan modification approved with your bank.  This is a FREE for you, all you have to do is call or  email us today.

Thank you for taking a few minutes of your busy day to read this, Dave Forsberg.

Dave is a Realtor with Prudential Utah Real Estate - Bountiful.

Phone: 801.651.0707   Email: utahhomesaver@gmail.com

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