In today's real estate market, the influx of houses for sale continues to keep house prices down. Borrowers are struggling to pay mortgages and foreclosures continue to rise. Lenders and sellers have been negotiating short sales, a hot topic in today's real estate world.
Short Sales Are A Means To Avoid Foreclosure
A short sale occurs when a borrower can no longer afford to keep paying a mortgage and the amount owed on the property is more than the house is worth. Some lenders will forgive the amount left after the house is sold while others will create a repayment plan with the borrower, depending on the level of hardship a borrower is exhibiting.
The lender requires extensive paperwork from the borrower in order to approve a home for a short sale. Once a short sale has been initiated, the homeowner has 90 days of foreclosure forbearance in order to secure an approved short sale.