What is a Short Sale
A "Short Sale" means that a property is sold for less than what is owed on the mortgage.
The Lender agrees to accept the lesser payment to satisfy the loan amount and the Seller receives no monetary benefit for the sale of their home. The Lender does not report a “Short Sale” as a Foreclosure to the Credit Bureau. It is, however, typically reported as 'Paid as Agreed'.
A “Short Sale” can typically be one of the best options for many homeowners that are delinquent on their mortgage (loan default), those with no equity and/or are facing Foreclosure.
Benefits of Doing a Short Sale
Allows the homeowner to seel the property for less than owed and remove the secured debt associated with the home
Seller can close the sale and walk away from the property with significantly less damage than a foreclosure
Seller typically experiences less impact to his/her credit
No out of pocket, up-front fees or costs with a Short Sale. Your lender pays for all fees including closing costs, escrow fees and Realtor commissions
Typically, Lender releases the lein and agrees not to go after the Borrower for the deficiency
Sellers get a fresh start and wipe the slate clean