Sue Saunders, Nevada Association of REALTORS® General Counsel wrote an article a few months ago about some of the pit falls of a short sale. Below is an excerpt, followed by a link to that article.
A short sale is an alternative to a foreclosure. When the borrower can no longer make the mortgage payments as agreed, he/she may choose the option of working with the lender to agree to accept a payoff of less than the balance owing on the loan. If the lender agrees to allow the borrower to sell the house for less than the original debt, it might not agree to release the borrower from the loan debt. Sometimes, lenders only release the lien so that the buyer at the short sale can take the house without any clouds on the title. However, releasing the lien does NOT relieve the borrower from owing the remainder of the loan. (MORE –>)
Jeff Sorg is a co-founder of OnlineEd®, a Web-based vocational school founded in 1997 where he also serves as Corporate Secretary, Chief Operating Officer, and School Director. Sorg holds vocational instructor licenses in Oregon, Washington, California, and Nevada and has authored numerous pre-licensing and continuing education courses. Sorg was awarded the International Distance Education Certification Center’s CDEi Designation for distance education in 2008-2018.
OnlineEd® provides real estate, mortgage broker, insurance, and contractor pre-license, post-license, continuing education, career enhancement, and professional development and designation courses over the Internet.