Cape Coral Florida's Real Estate Guide

So talking to your lender and trying to sell your home via short sale didn't work...what is there left to be done to avoid foreclosure? You can try to consult with your bank in one last attempt to avoid the foreclosure of your home.

Option III: Consult With Your Lender To Pursue A Deed In Lieu of Foreclosure (DIL)

With a DIL, you leave your home in move-in ready condition and turn over the keys to the bank. The bank in turn writes off the loan, packages these loans into REO packages, and lets real estate agents sell them off. So why would a bank consider a DIL? Part of the reason is that they get the property back in better condition and they avoid the expense of foreclosure. However, the more resources that the bank has put into the foreclosure (attorney fees, service fees, court fees, etc.), the less likely they are to do a DIL. They will have to buy the house back and lose the money on the loan anyway.

It is so important to be in constant contact with your lender when you are defaulting on your payments. By letting them know your intentions and plans, you are more likely to get their cooperation when it comes to negotiating a short sale or getting a DIL. If your main goal is to preserve your credit, be forewarned that a DIL puts a heavier penalty on your credit than a short sale. However, it is much better than a foreclosure. If you can avoid foreclosure, you have a much better chance of owning another home, one that you can afford, within a couple of years.