Re: Walking away

Posted by NJD on April 25, 2008 at 13:31:44:

In Reply to: Re: Walking away posted by Simon on April 25, 2008 at 12:54:13:

One reason a lender may choose to refuse to accept a deed in lieu of foreclosure, or, refuse to accept short sale proceeds has to do with insurance. The loan may carry insurance with the provision a foreclosure must be complete before the policy pays a claim.

If the anticipated insurance claim is greater than net proceeds realized from a DIL or PFSS, the lender has no incentive to facilitate either.

The lender will only do what is in its own, best financial interest. If the borrower happens to derive a benefit from a lenders action... it is incidental to the lender's intent.

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