Can a home seller sell a home for less than its mortgage?
This situation is known as a "short sale." Sometimes home owners can negotiate with lenders and have them split the difference between the sale price and loan amount, which still must be paid.
A short sale may be complicated if the loan has been sold to the secondary market because then the lender will have to get permission from Fannie Mae or Freddie Mac, the two major secondary-market players.
If the loan was a low-down-payment mortgage with private mortgage insurance, then the lender also must involve the mortgage insurance company that insured the low-down loan.
Resources:
* "How to Fight Foreclosure," Jeff Jensen, Jensen Publications, 200 Main Street, Suite 104-201, Huntington Beach, CA 92648; (714) 843-0321.
928-768-1441
FAX 928-768-1480
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Last modified:
March 01, 2008