What is Mortgage lenders?

What is a Short Sale & It’s Benefit

A short sale is when a financially distressed homeowner or persona having a problem managing the cost of day-to-day life sells his or her property for less than the amount due on the mortgage. The buyer of the property is a third party other than the bank (not the bank), and all proceeds from the sale go to the lender. The bank either excuses the difference or gets short of judgment against the borrower requiring the person in question to pay the lender all or part of the cost difference between the sales price and the price fixed or original price at the time of the mortgage. In some states, this distinction should lawfully be excused in a short deal.

Potential Advantages 

In short sales, the homeowner avoids the protracted and unpleasant foreclosure process and dispenses with the stigma attached. Short sales additionally limit the impeding effect that a foreclosure or bankruptcy would have on their financial status. The wait time to buy a new home is also significantly reduced against what it would be taken to deal a foreclosure. In addition to this, the seller in a short home will need not to pay the remaining loan amount pending to the lender. 

One advantage that a seller gets in a short sale is a cash incentive. 

Mortgage lenders benefit from avoiding the lengthy foreclosure process and receive the majority of the loan principal sooner. Any lenders primarily wants to get their sanctioned amount back as soon as possible and show lesser interest in taking responsibility for selling a home and a short sale helps them to attain these goals.


  • Sellers in control of the sale,the bank
  • The seller can avoid the stigma associated with a foreclosure
  • No mortgage payments to make
  • The seller can meet the new owners of their home which can alleviate some of their concerns
  • The home sale will handled like any other home sale
  • Loan applications do not ask questions about short sales, one may report that they sold their home
  • The wait for a short sale approval can extend the amount of time one can reside in their home
  • Deficiency judgments are negotiated between the seller and the short sale bank and if it is a seller’s personal residence and was financed through purchase money, there may not be a deficiency judgment
  • The negative effect on a credit score can be overcome more quickly than with a foreclosure

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