A short sale is a sale of real-estate when the proceeds of the sale do not cover the full amount of the debt owed on the property, the lien holders agree to accept less of the amount owed on the debt and release their lien on the real-estate. There are different types of short sales and short sale programs. Traditional, Hafa, va, fha. A short sale is often used as an alternative to foreclosure because it mitigates additional fees and costs to both the creditor and borrower. Both often result in a negative credit report against the property owner. Short sale agreements do not necessarily release borrowers from their obligations to repay any deficiencies of the loans unless agreed to by the parties participating in the transaction, Any unpaid balance owed to the lender is known as a deficiency. However in California legislation was passed keeping lenders from perusing a borrower for the deficiency. How do you know if you qualify for a short sale? Well if you are upside down on your mortgage, have a financial hardship or verifiable reason for not being able to pay mortgage, and a negative monthly balance, then you might be able to complete a successful short sale transaction with your lender.
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