A "Short Sale" or "Short Payoff" is a negotiated offer with a Lender to agree to accept less than the amount owed for all Mortgages on a property.

 The negotiations process can be lengthy.  It may take one week or several months to get an approval.  Lenders have several layers of bureaucracy and investors that have to approve the offer.

Yes, you can stay in the home.  A "Short Sale" means you are selling the house.  During this process, it is advised that you save as much money as you can for your next place of residence.  This is not a program that allows you to keep the house indefinitely.

The Lender(s) may offer to "Release" its security interest in the property in exchange for less than the total amount of the note.  A release will allow the property to be sold without paying off the obligations of the note.  However, the note is not satisfied.   Advantages: The successful "Short Sale" allows the property to be sold avoiding a Foreclosure on your credit report only in the pre-foreclosure period.  Time is of the essence.  Disadvantages: The remaining debt on the property, also called a deficiency still exists.  Meaning: You are still liable for the note and you still owe the money.  Reality: It is not likely the Lender will pursue the Deficiency unless you have other significant assets.

A Lender may agree to accept less than what is owed as complete and total satisfaction of a note and release its lien against the property.  This is something that we always ask for and frequently receive.  Advantages: The note and obligation to the Lender are satisfied for less than you owe.  When the property is sold the debt is paid off completely.  Disadvantages: In the past, you may have had some tax consequences.  However, recent legislation has alleviated the homeowners' tax and income status on foreclosure short sale properties