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Your questions are very general and the knowledge of DIL or short sale is not state specific. You will however need to hire a MO attorney to do the paperwork for a DIL if you go that way. I can analyze the differences between those two remedies if you waive the MO licensed attorney requirement here. Actually, which is better should be pretty obvious if you think about it, but the work has to be done "on the ground" by a local attorney, not by us.
That's why I asked for a MO attorney to respond. Does the service have any attorneys in MO?
So it is ok for you to answer this request.
Please also point me to a list of lawyers I can research.
Hello. I'm back. You asked if it was better to do a short sale or a deed in lieu of foreclosure. If your lender is willing to release you from personal liability, then they are the same to you. There are procedural differences: A deed in lieu is where you convey your property to the lender and the lender accepts it and releases you from any further liability. You start with an offer to the lender, telling them that you can no longer afford the home and wish to surrender it in lieu of foreclosure. They will ask for financial information from you and make a decision. If they approve the request, they're attorneys will prepare the necessary documents for you to sign. It is almost always required that you must give them immediate possession as soon as the documents are signed or within a very short time afterward. The lender will resell the property using a local broker. Very often the lender will tell you to first put the home on the market for sale and see what the best price you can get is. This must be done through a local broker and if the selling price is to be less than the mortgage balance, it is called a short sale. If your lender agrees to permit the short sale, sometimes they will also ask for money from the borrower. This is not usually the case with the bigger banks though. When the short sale is completed the bank will no pursue a deficiency against the owner, but in some jurisdictions it can do so.
All the legal document preparation is done by other people. Technically, you would need an attorney only to be sure that somewhere in the agreements you get released from further liability on the note and mortgage. Tell me what county in MO you are in and the largest city there, and I'll send you a listing from Martindale.
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Thank you for your response.
I am the Lender. So, from my perspective, the homeowner has offered to give the property back. I asked a listing agent to go get a listing with the owners.
So is it better for me to do a short sale, or take the DIL and sell as an REO?
Are there legal or tax issues I need to be concerned with in either case?
Sorry. That should have been obvious when you said you 'own' a mortgage note. If the owners can manage the sale to your satisfaction, and you are confident that they will bring you the best price, then go with a short sale. Let them sell it and you just show up at the closing and get a check and sign a satisfaction of mortgage.. A DIL means you take title and then do all the selling work. You will have to deal with the broker, the buyers, the inspectors, repairs and on and on. The botXXXXX XXXXXne is which is the best way for you to recover the most money with the least aggravation and risk. If you do a deed in lieu select any local attorney who handles foreclosures for lenders. They have standard forms for the documents you and your owner need to sign and s/he can handle the necessary title search work.
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