Short sale
A sale where the lender agrees to accept less than the amount owed on the mortgage. It needs lender approval, can take months, and is usually an alternative to foreclosure.
Also called: short pay, short payoff
Related terms
The legal process a lender uses to take and sell a property after the borrower defaults. Some states require a court case (judicial foreclosure), while others allow a faster non-judicial sale under a deed of trust.
An agreement where a struggling borrower signs the property over to the lender to settle the loan and avoid foreclosure. The lender must agree, and other liens can complicate it.
A legal claim against a property that secures a debt, such as a mortgage, unpaid taxes or contractor bills. Liens generally must be paid off or released before the property can be sold with clear title.
A permanent change to a mortgage's terms, such as a lower rate, longer term or added balance, to make payments affordable after a hardship. It is negotiated with the servicer and avoids refinancing.
The money a seller actually receives at closing after paying off the mortgage, commissions, and closing costs. It is shown on the settlement statement.