Mortgage Short Sale

A real estate short sale is sometimes referred to as mortgage short sale because in a short sale process, the homeowner's mortgages are forgiven and the homeowner is able to sell the house for what he or she owes.

When can a mortgage short sale be done?

A mortgage short sale or simply a real estate short sale can be done whenever the homeowner owes more on his or her home than the home is worth.

Can a short sale be done on multiple mortgages?

Absolutely. A mortgage short sale is not restricted to just one mortgage. In fact, most successful mortgage short sale cases are for homes with multiple mortgages on them. After all, most people are upside down on a mortgage because they have more than one mortgage. Don't fret if you have a second mortgage or a third mortgage - a mortgage short sale can still be done. For example, in California, short sale with second mortgage is very common since most residents of California have second and third mortgages. With the California housing market appreciating so much over the past few years, many homeowners are finding themselves upside down on mortgage. This makes California prime for a mortgage short sale.

Will the mortgage company really accept the mortgage short sale and let my debt go?

With a successful mortgage short sale, yes. What will happen is that the mortgage company will accept the lower price from the real estate investor and consider the entire mortgage balance settled. However, the homeowner needs to watch out for the cases where the bank will let the real estate investor buy the home for a lower value and then come after the homeowner for the balance of the mortgage. Most real estate investors with etiquette will try every way to have the bank wipe off all the debt and not come after the homeowner. However, there are some banks that won't settle the debt with the real estate investor and will insist on coming after the homeowner. There are also some real estate investors who don't tell the homeowner that they are not off scott free. So, it is up to the homeowner to ensure that before they close on the deal, they have it in writing that the bank will not come after them for the remaining of the loan.

• 2nd Mortgage Short Sale