Is Short sell or Deed-in-lieu better?

Submitted by Teresa from CO - 08/17/2010 - 2:43pm

I live in CA and have a second home in Colorado. I actually got a loan-mod approved 6 months ago, however the payment is still too high and I am about to fall behind again. I refinanced 3 times over the past 8 years, each time taking cash out for my business. In Colorado, will I be held responsible for the difference if I short sell? The Bank (B of A) told me it is better to do a deed-in-lieu, and I would be held harmless. Also, if I don't qualify for deed-in-lieu and can't find a short sell buyer, if they foreclose am I responsible for the loan and can they get access to my bank account?

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