What is a short sale? Brought to you by United Home Mortgage Center and Nicky Chambless

A SHORT SALE is when your Mortgage Lender agrees to discount your loan balance to an amount that your house appreciates for and/or an amount that you can more easily afford. These negotiations are done by the Lenders LOSS MITIGATION DEPARTMENT. Extenuating circumstances most heavily affect if the Lender will begin negotiations. These extenuating circumstances generally boil down to the present real estate market and the financial ability of the borrower. Most often short sales are approved to prevent foreclosure. Lenders have found that in most situations, short sales are quicker, there are less attorney fees and cost less then a foreclosure. THE MORTGAGE FORGIVENESS DEBT RELIEF ACT (2007 President G.W. Bush) states that the amount that the Lender forgives is considered taxable income to the borrower. There are many ramifications that you have to weigh before you proceed with a short sale, some of them are; (1) it will negatively affect the borrowers credit for several years and appear as “foreclosure process started” on their credit report for 7-10 years, (2) a short sale will make it almost impossible for the borrower to receive a mortgage for several years to come, (3) most every time the Lender will not update the borrowers credit to a zero balance once the deal is closed because they lost a lot of money in the process of you selling your home as a short sale.