Short Sale

Short Sale – When a borrower is delinquent on their mortgage and the home is worth less than is owed on it, sometimes there is an opportunity to sell the home on the open market before a foreclosure. The home is sold for short of what is owed on the loan. Both borrower and lender are able to avoid the foreclosure process.

  • Example: A short sale is an alternative to the foreclosure process whereby a delinquent, underwater borrower sells a home for a value short of what is owed on the loan and the lender agrees to take the net amount.
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