Posted by TSSP on March 29, 2006 at 12:12:04:
That depends on the lender. I once choreographed a short sale for a property in good to excellent condition, the mortgage and taxes were faithfully current, and the homeowner was fully employed with no discernable hardship. I never thought the lender would agree to accept less than it was due. But it did, by about $25,000.
I worked hard to prepare for the appraiser, and provided every scrap of info I could about the neighborhood’s decline, average DOM, etc.
The seller was only too happy to sell, quickly, and pay income tax on the forgiven debt. The listing broker bought it and flipped it within a couple of weeks after the happy homeowners moved out (into another home sold to them by the same broker)