Important Details

Foreclosure Options and Your Credit

Short Sale

A short sale is the sale of a home for less than the existing balance on the mortgage. If you’re having financial hardship, your lender may consider this option in order to incur a smaller financial loss than might result from a foreclosure.

A short sale may not eliminate the remaining balance of the mortgage unless settlement is clearly indicated on the acceptance offer. In addition, multiple levels of approvals may be necessary, such as a second mortgage lender and/or a mortgage insurance company.

It may be beneficial to hire an experienced real estate agent. A qualified agent is able to provide you with a Broker Price Opinion (BPO) to give you an estimate of market value.

Deed in Lieu of Foreclosure

A deed in lieu of foreclosure is the borrower’s voluntary surrender of the property in order to avoid foreclosure. Your lender will assess factors, such as the costs incurred to continue with the foreclosure process as well as the number of liens on the property, to determine whether this process is in the lender's best financial interest.

In many cases it is easier for the lender to complete the foreclosure process than to accept a deed in lieu. If your lender accepts the deed in lieu process, it may not extinguish your responsibility to pay any loan deficiency after the sale of the property.


A foreclosure is the legal process where a borrower's ownership of a property is dissolved due to default. Typically, the property is sold at a public auction and the proceeds used to pay the loan. The foreclosure process varies by lender. It may be beneficial to contact a foreclosure counselor or an attorney to help you understand your options and rights.

Find out about the credit implications and how to recover.

Important Details




Zions Bank sponsors the Homeowners Café® as a service to the community; therefore, all information provided should be considered as educational in nature and not as professional services. By utilizing the services of, and the information provided by, the Homeowners Café, you acknowledge and agree this does not constitute any legal commitment to become a customer of any bank, including Zions Bank and its affiliates nor does it constitute an offer of any extension or modification of any credit to you by Zions Bank or its affiliates.

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Homeowner’s Café®
This page was last modified on Thu Sep 21 20:15:50 MDT 2017