lender or lenders (depending on how many mortgages there are) agree
to allow the homeowner to sell the property for an amount less
than what is owed on the loan(s).
The consent of the seller’s lender(s) is needed because without
it there wouldn't be enough money from the sale to pay off the
lenders in full in addition to the other costs of the sale (like
commissions and other closing costs.)
As a result, the lender’s lien(s) would remain on title, and
the homoeonwer selling the property would be unable to
transfer title to the buyer free of monitary liens.
Simply put, a short sale is where the lender agrees to allow
the homeowner to sell the property for less than what is owed
on the mortgage (s).
Peroperties that are worth less than the amount owed to the
secured lender(s) are often referred to as being “under water”
or distressed properties.
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