How Short Sale Can Help
While there are more than a few requirements to qualify for a short sale, banks generally grant short sales for two reasons. One, the seller must be experiencing financial hardship and two, there isn't enough equity in the home to pay off the mortgage after closing costs. Some examples of hardship include reduced income from unemployment, divorce, a medical emergency, bankruptcy, or the death of the sole income provider. The seller must prepare a financial package for submission to the short sale bank. Each bank has its own guidelines, but the procedure is similar from bank to bank.
Johnny Advice: You can ask the lender to accept a payoff that is less than the balance owned. Disadvantage you the owner will not receive any equity cash.