difference between a short sale and deed in lieu
What is the Difference between a Short Sale and Deed in Lieu of Foreclosure? In a short sale, the homeowner is responsible for placing his or her home up for sale and the lender collects on the proceeds, as opposed to a deed in lieu of foreclosure where the lender sells the home as a real-estate owned home and the lender collects on the proceeds.
In either a short sale or a deed in lieu of foreclosure, there is a difference between the amount the borrower owes and the amount the lender actually receives in the transaction. In a short sale, itâs the difference between the mortgage balance and the sale price. In a deed in lieu of foreclosure, itâs the difference between the mortgage balance and the market value of the home. Most states allow lenders to seek judgments against borrowers for that difference, known as a deficiency balance.