What is a Short Sale? What does it mean?
A Short Sale occurs when a home Seller, who needs to sell their home, owes more in debt secured by the home than what the seller can expect a buyer to pay for the home. In other words when the sale occurs, the proceeds of the sale will not cover balance owed on the loan(s) and or liens against the property. The lender and junior lien holders agree to take less than what is owed to them in this process.
The Seller at all times is still the owner of the property and the creditor’s loss mitigation departments are contacted to work out a settlement so the home owner can sell the property. The only say the lender/creditors have in the sale of the property is if they will agree to take less than what is owed based of offers accepted by the sellers. The seller is the home owner not the lender/creditors.
The lender in these cases where they agree to the terms of the short sale take a loss in the Short Sale to avoid the larger loss/costs of a foreclosure. the main goal of a Short Sale is to prevent Foreclosure.
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