For owners who can no longer afford to keep mortgage payments current, there are alternatives to foreclosure proceedings. One of those options is called a "short sale." When lenders agree to a short sale, it means the lender is accepting less than the total loan amount due. Not all lenders will accept short sales or discounted payoffs,especially if it would make more financial sense to foreclose, but it is a possible option if the owner and property qualify.The Mortgage Forgiveness Debt Relief Act of 2007 will provide that the seller cannot be held liable for any "debt forgiveness" tax.
