FinanceIntermediateCalifornia Exam

What is a 'short sale'?

AA sale that closes in less than 30 days
BA sale where the lender agrees to accept less than the full mortgage balanceCorrect
CA sale of a property under 1,000 square feet
DA cash sale with no financing contingency

Why A sale where the lender agrees to accept less than the full mortgage balance Is Correct

Answer B: A sale where the lender agrees to accept less than the full mortgage balance

A short sale occurs when a lender agrees to accept less than the outstanding mortgage balance as full satisfaction of the debt, allowing a distressed homeowner to sell and avoid foreclosure.

Exam Tip: Finance

Finance questions often involve calculations. Master the T-bar method, understand the difference between conventional and government-backed loans, and know key ratios like LTV and DTI.

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