What are some “Short Sale” alternatives?

• Deed in lieu of foreclosure

Some lenders may be willing to take a property into its REO portfolio rather than go through the foreclosure process. The deed in lieu option usually involves the lender’s forgiveness of the full amount of the dept. Keep in mind though that the lender may not consider a deed in lieu of foreclosure if there are junior lien holders: the foreclosure would wipe out the junior lien holders on title, whereas the junior lien holders would survive a voluntary deed in lieu.

• Loan Modification

A lender may be willing to rewrite the terms of the loan in order to bring it out of delinquency. Loan modifications often require a processing fee.

• Refinancing

In the past year, both the federal and Massachusetts government have worked to develop programs that would allow certain borrowers at risk of default to refinance their homes via governmentally issued programs. The seller may be able to avail him/herself of such a program. If the seller wishes to retain their home rather than sell it, this would be a good option to research, especially with the new stimulus package that is about to be released.

For more information on the short sale process or any other questions, please do not hesitate to contact us.

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