Which is better, a short sale or a deed in lieu of foreclosure?

Cheryl: Hi. My question is; we filed for a modification because they have a high interest rate and they approved the short sale. Then they called and offered deed in lieu of foreclosure. Should we go for the short sale or the deed in lieu of foreclosure?

Attorney Tom Olsen: I think you’d want to explore both possibilities Cheryl. What’s key to you, I think, would be two things. One would be that when you’re done with this deal whether it’s a deed in lieu or short sale, that they have written off this debt; they are not going to pursue you anywhere down the road. Then number two; what would be the least damaging to your credit? I’ve got a feeling that a deed in lieu foreclosure is going to be the answer for you for both of those things Cheryl, but I want you to double check.