My Internet research indicates that a deed-in-lieu-of-foreclosure and an actual foreclosure affect one’s credit the same. Therefore an actual foreclosure might be the more favorable of the two because one would get to occupy the property for longer and possible get paid “cash for keys” after the foreclosure to move out. A slight benefit to the deed-in-lieu would be fewer late pays, but for most people this very minor credit benefit would not offset the financial loss from moving out many months sooner.
A short sale is significantly more favorable on ones credit and would therefore be a better choice if one could be guaranteed to not get hit with a deficiency judgment afterward and guaranteed not to have to pay any IRS ordinary income tax on the lender’s shortfall. I’m a short sale expert Realtor and can make the above claims for 20 of my current 21 short sale listings. http://www.HomeAuctionAdv.com.
Yes, there is debate as to my ability to makes these claims. However, I am standing behind my research with confidence. Regarding taxation, the California Assc of Realtors legal team may disagree with me, but the US House of Representatives sided with me on Oct 4, and I’m confident the Senate and President will follow suit.
I’m not a frequent pigginton reader, so please don’t be offended if I don’t respond to any replies to this post. Thanks!
