Deed-in-Lieu, Short Sales & REO:
Deed-in-lieu: A deed-in-lieu of foreclosure is an arrangement where you voluntarily turn over ownership of your home to the lender to avoid the foreclosure process.
REO: Real Estate Owned is property acquired through foreclosure or deed-in-lieu of foreclosure.
Short Sales: According to Fannie Mae, “A short sale, also known as a pre-foreclosure sale, is when a home sells for less than the balance remaining on their mortgage. The financial institution that is the first lien holder on the mortgage must approve a short sale since it means taking a loss on that loan. If Fannie Mae is the first lien holder, we work with the mortgage company that services your loan (i.e. collects your mortgage payments) to communicate with you throughout the short sale process. We provide guidance to the servicer on who is eligible for a short sale, the property listing price, and acceptable contract terms and closing costs.
If your servicer notifies you that you are deemed eligible for a short sale and a contract to purchase your home is approved, you can sell your home and payoff all (or a portion of) your mortgage balance with the proceeds.”
Short Sale is an alternative to foreclosure and may be an option if:
- You are ineligible to refinance or modify your mortgage
- You are facing a long-term hardship
- You are behind on your mortgage payments or facing imminent default
- You owe more on your home than it's worth
- You can no longer afford your home and are ready or need to leave
- You have not been able to sell your home at a price that covers what you still owe on your mortgage
- Written by Houses In NOVA