1. A seller must have a financial hardship to be considered for a short sale.
A seller without financial hardship will be considered for short sale by most lenders. However, short sale approval commonly requires some seller constribution to the lender’s loss via promissory note, cash contribution, or both. Stay tuned for more information.
2. Less than half of short sales get approved.
Over 90 % of short sales with an at market value offer are approvable if the buyer stays in the deal through the approval process.
3. If a property is foreclosed upon, the borrower is released of all debt.
Borrower is only released of the debt if lender forecloses via advertisement. If lender forecloses via litigation, then borrower is still responsible for the debt. If there is a 2nd or 3rd mortgage, borrower is still responsible for those even after the end of the redemption period.
4. After the sheriff sale, the second mortgage is gone.
The second mortgage still has a lien on the property after the sheriff sale The 2nd mortgage lien only goes away at the end of the redemption period. Therefore, if seller is redeming from the sheriff on foreclosing mortgage in a short sale, an other mortgage holder is entitled to the proceeds and must be negotiated for release of lien via short sale.
