Short Sale vs. Foreclosure

Short sales are much different from foreclosures in both the result to the homeowner and in the process itself. In a short sale, the lender agrees to the short sale process, with the benefits to the homeowner being reduced impact to his credit score, and the possibility of waiver of any payoff shortfall. A foreclosure is a process forced on the homeowner by his lender with the goal of evicting the homeowner from the property so that the lender can seek to dispose of the property itself, generally by public auction.

If the homeowner has already been given notice of foreclosure by the lender but he successfully enters into a short sale contract prior to completion of the foreclosure process, then the foreclosure is generally stopped by the lender until the property is sold to the new short sale buyer.

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