Options to Sell the Property
In many instances, a homeowner will be unable to qualify for any of the loss mitigation programs that would allow them to stay in the property, and must sell the property in order to resolve their financial difficulties. Other times it may simply be a realization by the borrower that it is in their best interest to sell the property and get out from under the defaulted loan.
General Options
Short Sale - When the proceeds from the sale of a property are not sufficient to pay the loan off in full, the lender may agree to accept a "short sale," meaning the lender will agree to release its lien on the property without its loan being fully paid off. Click here to read all about selling your property with a short sale.
Conventional Sale - The debtor has sufficient equity in the property to market and sell it through the usual markets.
Seller Carry Sale - In order to close a transaction and payoff the defaulted loan, the seller agrees to carry back a portion of the financing.
Sell "Subject To" - This means that the seller has agreed to sell the property to a buyer "subject to" existing financing. This means the loans are not paid off and are not assumed. The buyer, as part of the transaction, simply is required to bring the loan in default current and continue to make the payments on the loan thereafter until the property is refinanced or sold. A "subject to" sale could violate the "due on sale" clause.