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What is a short sale?

A Short Sale is one way of avoiding foreclosure and bankruptcy. It is when the lender accepts less than the loan amount (a discount on the loan) and releases the lien on the property at closing, without requiring the owner to make up the difference. The bank in return accepts the proceeds as full settlement of the debt.

A borrower must prove that a hardship exists. The lender will provide you a short sale package it is used to determine whether a homeowner can no longer afford the property. Most lenders already have a standard package which they will send to the borrower upon request. The borrower is expected to provide financial information to include income and household expenses.

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