Hi, I’m Matt Fetick with SoldByShortSale.com and Philadelphia’s premiere short sale specialist. I’m proud to do so and I really like the opportunity to help homeowners that need a helping hand when things are complicated for them. So many good people that start out doing the right things find themselves in tough situations, like they owe more money on their house than it’s currently worth.

One of the alternatives to foreclosure is called a deed-in-lieu; it is ultimately what homeowners think about when they think about walking away from their house. In other words, they give the keys to the bank and walk away. A deed-in-lieu of foreclosure can be a good alternative to foreclosure but there’s a few things I would like to make sure you evaluate if you are contemplating a deed-in-lieu of foreclosure.

Number one, is the lien holder forgiving your unpaid balance? A lot of individuals believe that when they give the deed back to the lien holder, they are free and clear but this isn’t necessarily true. When you borrowed the money, you signed two documents, the mortgage and a promissory note, which was a promise to repay a certain amount of money. When you give back the house you are allowing them to utilize the mortgage on the property to satisfy the mortgage. However, if you purchased the property for $300,000 and the mortgage company sells it for $250,000, you could be responsible for that leftover balance. If you are going to do a deed-in-lieu, make sure you have someone, whether it is a lawyer, a short sale expert, or other licensed professional, look at the document to see if it clearly states you’re not responsible for the deficient balance. If not, you could be responsible for maintenance, lawyer’s fees and other types of things and you will not know how much you owe until you receive a letter after the deed-in-lieu.

Second of all, if you have a home equity loan or second or third mortgage and you do a deed-in-lieu on the first, this does nothing to cure the other lien holders. You’ll start getting collection notices for this unpaid balance. A deed-in-lieu may be a good alternative but you really need to evaluate all of the information and get professional help.

If you are thinking about a deed-in-lieu of foreclosure or are searching for any of the other alternatives to foreclosure, such as a short sale, please contact me and let me provide you with the best resources and contacts to help you evaluate your situation. Our goal is to help you make the smartest decision for you and your family so that you can move on with your life. Please get in touch with me, Matt Fetick, short sale specialist, at 610.427.4420 or visit my website SoldByShortSale.com.

For more information on short sales and how to avoid foreclosure, visit the Sold By Short Sale blog or you can also contact the Matt Fetick team and get started today.