Short Sale Facts
Short Sale Facts For Maryland Homebuyers
Shortsale: Homeowner owes a lender more than the current value of the property
The short sale process can be a difficult road to travel due to the nature of the sale. They can also be a barrier for motivated buyers because they often take 3 months or more to complete. I don't know of any banks that are in a rush to lose money which is what happens when a short sale situation arises, but in the same breath the losses a bank could take from the same property going into foreclosure can be even more damaging to a portfolio.
Contrary to popular belief you don't have to be behind on mortgage payments to attempt to kickoff a short sale. If you happen to be in that situation(Current On Payments) it can be made even more difficult to get your lender to accept the transaction when payments have been timely. Nine times out of ten a lender will want to see some type of hardship that may lead to an impending foreclosure before approving.
A short sale will show on your credit report as "paid in full for less than agreed" or " settled for less", and it has been reported that consumers will see a drop in credit anywhere from 50-120 points. Major point drops have been reported primarily by consumers who were at some point late on payments. Still a better battle to fight than foreclosure.