SHORT SALES

A short sale is predominantly a consensual voluntary arrangement made among a person and the creditors who have an interest in the short sale by virtue of recording a lien or encumbrance against the person's primary residence. In a short sale, when a lender agrees to take less than the amount that is owed on a piece of property, the borrower accepts an offer to sell the property for an amount short of the amount that repays all the liens on the property. The benefit of a short sale occurs when your net proceeds from a short sale are insufficient to cover your loan balance, but the lender and all the junior lenders and other lienholders agree or are required by law to take a lesser amount or to take nothing at all. A successful short sale includes the lender and the junior lenders forgiving any remaining loan balance and clearing you from any future contractual obligations to the lender. This also requires any and all other lien holders agreement to release their underwater liens in order to permit a short sale.