Can a home be sold for less than its mortgage?

Click stars to vote (left is low, right is high)

(No Ratings Yet)

 Loading ...

[?]
 Print This

Sometimes. But it is a complicated process and a lot will depend on the lender.

This process is called a “short sale,” which occurs when a lender agrees to write off the portion of a mortgage that is higher than the value of a home. But, usually, a buyer must be willing to purchase the property first.

A short sale may be more complex if the loan has been sold in the secondary market. Then the lender will need permission from Freddie Mac or Fannie Mae, the two major secondary-market players.

If the loan was a low down payment mortgage with private mortgage insurance, the lender also will need to involve the mortgage insurance company that insured the low down payment loan.

The short sale can keep the homeowner from landing in bankruptcy or foreclosure. But it is not an easy procedure to approve, and it involves as much, if not more, paperwork than an original mortgage application.

Instead of proving your credit worthiness and financial stability, you must prove you are broke. And any remaining difference between your home’s value and the balance on your mortgage is considered a forgiveness of debt, which usually means it is taxable income.

Discussion Forum

Topic	Posts	Last Poster
Can anyone explain me about foreclosure real estate investing????	3	Randy
Now I have a web site how do I get google etc to recognise it?	5	internetresearchwendy
NEED AGENTS / & REFERRALS	13	JohnMcArdle
If you Need a Office for Rent	5	ireancom
Dubai Property	1	bhomes
Seller switched appliances	9	RealtorWithVision
Safety Especially Women	4	CindyHartman
The Real State of Real Estate	2	WalterB
Southern Agents Advertise on TV in the North	1	vnebbia
Market Slow? I Don't Think So (relatively speaking)	5	ozone

How to Beat Discounters at the Listing Table

By Craig Proctor
RISMEDIA, July 9, 2008-Your listing presentation is the most important contact you will have with a seller prospect. In most cases, it’s the first face-to-face contact you will have with this prospect, and the only chance you’ll have to help them understand how you can benefit them in a way that other agents […]