Escrow & Title
When a Virginia property is purchased through a short sale, the lender agrees to:
AForgive all debt automatically
BAccept less than the full mortgage payoff to release the lien and allow the sale to proceed✓ Correct
CTransfer the mortgage to the buyer
DSue the seller for the deficiency immediately
Explanation
In a short sale, the lender accepts less than the full outstanding mortgage balance as full or partial satisfaction of the debt in order to allow the sale to close. The seller avoids foreclosure but may face a deficiency.
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Key Terms to Know
Short Sale
A sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Transfer TaxA tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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