What is Short Sale?

Question

I'm in Oregon, can't pull payments. It's either foreclosure or short sale. What is short sale and how does it work?

Thanks :)

Answer 1

A short sale, briefly, is when a homeowner gets permission from his bank or mortgagor to payoff less money than is owed on the property.  A bank will only consider allowing you to do this once they determine that you really don't have any money.  Be prepared to show them all of your financial information.  You should be aware that just because the bank agrees to accept less money from the sale of the home, that does not mean that they won't try to come after you for the difference!  Consulting an attorney is always wise in these situations.

Answer 2

In general and in brief, a short sale is when you go to your lender and tell them that you can no longer pay your mortgage, and as an alternative to foreclosure, you will do everything you can to effect a quick sale of your home.  The advantage of the short sale is your lender agrees to take all of the proceeds of the sale and apply it to your mortgage and then write off the remaining balance, and you walk away from the home owing nothing.  You obviously don't take any cash away either.  If your lender agrees to this, your credit will be bruised, but it's a lot better than having a foreclosure on your credit record, and it's better for the lender as well.  You need your lender's cooperation to do this, but in these times, you will probably find them cooperative if not helpful.  I wish you the best.

(Mike and Andrea are wrong.)

Answer 3

A short sale is where the bank or mortgage company agrees to accept less than the amount of your outstanding mortgage as full satisfaction of your mortgage debt.  In other words, you sell the house for less than you owe on it and turn over the proceeds to the bank.  This is definitely preferable to foreclosure as it should not negatively impact your credit rating.  Good Luck!

Answer 4

It means you're selling for less than you owe on the mortgage.  You still owe the difference to the mortgage company.

Answer 5

A short sale is agreed to by the lender, meaning they will take a look a an offer and if it is less than the mortgage balance and they accept it, then you are off the hook for the balance.  Make sure they record the "satisfaction of mortgage".