A short sale is an alternative to foreclosure in which the proceeds from selling the home won’t cover the balance owed on the mortgage.

The lender agrees to release the homeowner from his/her debt obligation, but may or may not waive the unpaid difference, plus interest and penalties. Many creditors require the borrowers to pay the difference unless they can prove economic hardship.

A short sale will negatively affect the homeowner’s credit rating, but not as much as a foreclosure would.

Short sales are a good option if:

  • You can’t refinance or modify your mortgage payments
  • You’re facing long-term hardship
  • You’re behind on your mortgage payments
  • You owe more on your home than it’s worth
  • You can’t sell your home for a price that covers what you owe on the mortgage
  • You can’t afford to keep your home


Certain loans offered by Fannie Mae and Freddie Mac may qualify for a short sale for the following hardship reasons:

  • Unemployment
  • Divorce
  • Long-term disability
  • A change in job location that is more than 50 miles away
  • Failure of a business
  • Death of primary or secondary wage earner
  • Natural or man-made disaster


Lenders don’t have to approve short sales, and often they take weeks or months to make a decision, which can be very stressful for the parties involved. But sometimes the long wait is worth the effort and an agreement can be reached.

While a short sale is one alternative to foreclosure, it doesn't help people who want to keep their homes. We can help people who want to keep their homes and stop foreclosure for good.

Castle Law Office has been handling bankruptcies for Kansas City clients from more than 14 years. If you need the fresh start bankruptcy can provide, call us today at 816-842-6200 to speak with an attorney. Or click here to email us and schedule your free consultation.