Hawaii Short Sales

The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.

Most Hawaii Short Sales leave a deficiency balance for which the Mortgagor / Borrower is still liable.  In 99% of all cases it is not a settlement-in-full. A deficiency balance will remain while the mortgage broker, real estate agent / broker, loan officers, title and closing agents retain their profit. No regulatory agency governs this hybrid transaction.

A Hawaii short sale typically is executed to prevent a home forclosure in Hawaii.  Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, advantages include avoidance of a foreclosure on their credit history and partial control of the monetary deficiency. A Hawaii short sale is typically faster and less expensive than a foreclosure.  In short, an Hawaiian short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount.  It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.