Foreclosure May Be Preferable Option To Short Sale For Some

A Palm Beach Post real estate blog offers the following points in support of the proposition that, for some home sellers looking to unload a home that's worth less than the outsatnding mortgage balance, allowing the home to go into foreclosure may be better than arranging a short sale:

• Liars have to come clean. If the seller took out a “liar loan” and indeed lied about his income, the deception will become clear in the voluminous documents required by the bank. Better to go into foreclosure than to face federal charges of bank fraud, [...].

• The kids’ college savings will have to go. Lenders are scrutinizing sellers’ assets and forcing them to empty out nest eggs and college funds. If the seller loses the home in foreclosure, those assets aren’t at risk.

For more, see Considering a short sale? Foreclosure might be a better choice, Realtor says.