Busted: Bankers and The Global Economy

June 25, 2008

Selling Short to Avoid Foreclosure

Filed under: banking, investment, money — Tags: , , , , , , , — digitaleconomy @ 12:02 pm

Increasingly, Americans are finding themselves in a no-win economic position while facing the possibility of foreclosure. The falling value of homes on the market is creating a substantial issue for lenders and borrowers alike. As record numbers of citizens lose their jobs and face other life situations, some are finding some solace in selling short.

Selling short requires the agreement of the banking institution that holds the mortgage and involves selling the house below the value of any held mortgage by the institution. Naturally, the banking institution would need to see a value to the bottom line over foreclosure in order to cooperate. In some cases, this action of selling short is exactly what is needed to get overstressed American pocketbooks out of a major cash crunch.

This action is not without effects to the borrower. Selling short is projected to show up on any credit report, thus impacting personal credit ratings. However, in an age “market housing walk-aways”, trying to do the “honorable thing” is exactly the choice of many homeowners for all kinds of variable reasons. Like banks, American citizens often have their own “bottom line.”


  1. Unemployment stats are up but there are still so many high paying jobs posted on employment sites ie


    There still seems to be a strong demand for professional talent.

    This, of course, depends on who you are and where you live. My best to all that need help. ~ E.M.

    Comment by Susan Kennedy — June 25, 2008 @ 2:12 pm

  2. Short sales are definitely better than a foreclosure (as far as credit scores go), but it sure is a pain for the buyer.

    Comment by Susan — July 10, 2008 @ 11:59 pm

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