Terms to Know:

People and Roles

Borrower — The person(s) on the loan who signed and is legally responsible to repay. Not always the same as the people on the deed.
Seller — The person selling the home (may or may not be the same as the borrower).
Buyer — The person purchasing the home.
Lender — The bank or company connected to the mortgage debt and approval of the short sale.
Loan Servicer — The company you make payments to and call; they manage the file even if they don’t own the loan.
Investor — The company/agency that actually owns the loan and often sets the rules the servicer must follow.
Loss Mitigation — The lender’s department that handles options to avoid foreclosure (short sale, modification, deed-in-lieu).
Junior Lienholder — Any lienholder behind the first mortgage (second mortgage, HELOC, judgments) who may need to approve.

Core Short Sale Basics

Short Sale — Selling for less than what’s owed, with lender approval to accept less than full payoff.
Hardship — The life event that makes keeping the home unrealistic (PCS orders, job change, medical, divorce, etc.).
Default — Being behind on payments or violating loan terms, often triggering foreclosure steps.
As-Is Sale — Selling the home in its current condition, usually with limited or no repairs by the seller.

Paperwork and Required Forms

Loss Mitigation Package — The lender’s required set of forms and documents to review your short sale request.
Hardship Letter — Explains what happened, when, and why selling is the best option; should match the documents.
Third-Party Authorization (TPA) — Permission for your agent/negotiator to speak with the lender about your loan.
Authorization to Release Information (ROI) — Another name for TPA; same purpose.
Uniform Borrower Assistance Form (UBAF) — Standard form summarizing income, expenses, assets, debts, and hardship.
Financial Documents (“Financials”) — Proof documents like pay stubs, bank statements, and tax forms that support your file.

Listing, Offer, and Negotiation

Listing Agreement — Contract hiring an agent to market and sell the home. The bank will require a full copy of this document to approve the short sale.
Offer to Purchase — Buyer’s written proposal; lenders usually won’t review a short sale without one.
Net Sheet — Simple breakdown showing what the lender will receive after costs and fees.
Closing Costs — Normal costs of selling/buying (title, taxes, settlement fees). Lenders may limit what they allow.
Repair Credit / Concession — Price reduction or credit for repairs; lenders often restrict concessions in short sales.

Value and Pricing Tools

Comps (Comparable Sales) — Recent nearby sales used to support the home’s value and the offer price.
BPO (Broker Price Opinion) — Lender-ordered value estimate, often done by a local agent. Rarely used in a VA short sale.
Appraisal — Formal value opinion by a licensed appraiser, often required by the buyer’s lender. For a loan backed by the Department of Veterans Affairs, an appraisal is ordered by an appraiser certified to perform appraisals for the VA.

Title, Liens, and Property Charges

Lien — Legal claim against the property for a debt that must be paid, settled, or released to sell.
Second Mortgage — Another loan secured by the home (home equity/HELOC) that may also need to approve.
HOA Dues / HOA Lien — Amounts owed to an HOA; unpaid dues can create a lien that must be handled.
Property Taxes — County/city taxes; unpaid taxes can become a lien and affect closing.
Title Search — Research to find liens or ownership issues that must be cleared before transfer.
Title Insurance — Protection for the buyer/lender if a title issue appears later.

Foreclosure Timeline and Loan Numbers

Foreclosure — Legal process where the lender takes the home due to missed payments.
Foreclosure Sale Date — Scheduled auction date if foreclosure continues; creates urgency for the short sale.
Reinstatement — Amount needed to bring the loan current (past-due payments + fees).
Payoff — Total amount needed to pay off the loan in full at closing (usually more than reinstatement).

Approval, Closing, and Final Steps

Short Sale Approval Letter — The lender’s written approval with price, fees allowed, and deadlines.
Approval Conditions — Rules you must meet to close (dates, fees, buyer terms, paperwork requirements).
Closing Disclosure (CD) / HUD-1 — Final closing statement showing exactly where all money goes. For cash transactions, a HUD-1 is used, for financed transactions a Closing Disclosure is used.
Closing — The signing where ownership transfers and funds are disbursed.
Deed — The document that transfers ownership from seller to buyer.

Deficiency and Post-Closing Liability

Deficiency — The gap between what’s owed and what the lender receives from the sale.
Deficiency Judgment — A court judgment that may let the lender collect the deficiency from the borrower, depending on loan type and state rules.
Release of Liability — Written confirmation the lender won’t pursue the borrower for the unpaid balance after closing.
Promissory Note (Short Sale Note) — Agreement to repay part of the deficiency after closing, usually in payments.
Cash Contribution — Money the lender asks the borrower to bring to closing as a condition of approval.

Alternatives to a Short Sale

Loan Modification — Changes loan terms to reduce payment and help keep the home.
Forbearance — Temporary pause/reduction in payments; usually payments are still owed later in some form.
Deed-in-Lieu of Foreclosure — Borrower voluntarily transfers the home to the lender to avoid foreclosure auction.

Real Stories From Families

Who Found Their Way Forward

This seller contacted us when they received orders to go to the drill field. They contacted us very early in the process and we were able to get them listed, under contact, short sale approval, and closed without them ever missing a mortgage payment. Their due diligence in contacting us early was one of the smartest decisions these sellers make in the listing process.

Life took an unexpected turn for this seller when he was discharged from the service. We were able to keep the home from going into foreclosure with a buzzer beater closing just before the New Year, and just before the short sale approval expired. The house was sold to a new family who brought it back to it's original glory!

The seller contacted us after he completed his loss mitigation package with his bank. He needed someone to get him an offer quickly to continue the short sale process. The day of listing we were able to secure an all cash investor offer for him and we got short sale approval in 22 days. This house remains our record for the fastest days from offer to approval.

This family contacted us after having their house as a rental for a while with another property management company. The condition of the home was poor and the sellers were in need of a short sale and an investor buyer due to condition. We were able to quickly get an offer from one of our trusted investors who was willing to go through the short sale process with us and get them closed quickly to avoid excessive damage to the seller's credit.

Life took an unexpected turn for this seller when he was discharged from the service. We were able to keep the home from going into foreclosure with a buzzer beater closing just before the New Year, and just before the short sale approval expired. The house was sold to a new family who brought it back to it's original glory!

See More Stories

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We specialize in short sales and foreclosure avoidance when timelines are tight and mistakes are costly. Our team has handled hundreds of VA short sale and foreclosure transactions and understands lender-driven processes. We help homeowners facing PCS orders, medical hardships, and sudden market shifts move forward with a clear plan and confidence.

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(910) 939-4905

Jacksonville, NC 28546

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Document Checklist

Hardship Letter

UBAF Form

Authorization Form