WHAT IS A SHORT SALE? A short sale (also known as a short payoff) is selling a security that the seller does not own but is committed to. It is used to capitalize on an expected decline in the security's price. When a homeowner owes more than can be collected through a real estate sale, a short sale allows them to sell their property to avoid a foreclosure for themselves and the lender. Short Sales present a unique opportunity for homeowners, mortgage servicers, real estate agents and investors. By accepting a short sale, or a voluntary transfer of title, the lender experiences savings on average of $14,000 and reduces the time to receive payment by 6 months, as reported in July 2004 by the Deputy Chief Economist at Freddie Mac. A short sale minimizes the time and costs associated w...
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