What is a short sale?

A short sale occurs when a homeowner sells their property for less than what is owed on the mortgage. What creates a short sale is the homeowner does not have the means to pay the difference, and the lender agrees to accept less than the amount owed.

Now a bank is not going to just accept the homeowners word that they do not have ANY means to pay their debt, the homeowner needs to demonstrate a true financial hardship that is causing the mortgage to be unaffordable and a total default a very real possibility.