With the record number of foreclosures resulting in record number of people looking on the internet for help in avoiding or stopping foreclosure, there has to be a mixture of terms that people do not understand. Short sale foreclosure is one such term.
Actually, there is not such thing as "short sale foreclosure". But the terms are related. Here's how.
Foreclosure is the legal process which a mortgage lender uses to take possession and ownership of a home where the borrower (home owner) has not made his monthly mortgage payments. Foreclosure is sort of like car repossession when someone has not made his car payments. However, there are a lot more legal steps to take.
A person facing foreclosure has to pay the mortgage lender in order to stop or avoid foreclosure, but there are options on how to pay. Unfortunately, not every option is available in every situation. For example, a mortgage lender may be willing to delay a payment, but the borrower may not be able to make the payment even if it is delayed.
One option that is available sometimes is a short sale. A short sale is when a borrower sells his home for an amount short of the actual amount owed on the home loan. For example, a person may actually owe $100,000 on his home loan. The lender may accept $95,000 if the borrower sells the home.
Lenders are not required to accept short sales because they will receive less than the actual amount owed on the home loan. However, because of the cost of foreclosure, cost of maintaining an empty home, and the unknown time and price to sell a home, a lender may be willing to accept a lesser payoff. It may save the lender money.
In summary, there is no such thing as short sale foreclosure. Short sale is an option that is available in some cases to avoid or stop foreclosure.
This article is general information. If you have any questions of any nature about avoiding foreclosure, talk with a lawyer licensed in your state.
This article may be republished, but the wording must not be changed and the author links must remain active.
