The votes are in: Short sales for everyone!

Of the 196 readers who participated in our recent poll, 22% (43 voters) reported having closed a short sale for a non-defaulting homeowner whose only hardship was negative equityThe condition of a property owner owing more on a mortgage than the current fair market value of the encumbered property., with no financial shocks affecting their ability to pay.

Lenders will likely agree to short sales for hardships other than negative equity when a homeowner is current on their payments. These hardships can include the need to relocate for a job or to escape a neighborhood blighted by vacant, foreclosed homes.

A homeowner who enters into a short sale without first going delinquent would avoid taking a huge hit to their Fair Isaac Corporation (FICO) score for the delinquencies, or eventual default. However, short sales are still reported by most lenders as debt “not paid as agreed,” and thus a homeowner who enters into a short sale, even without a delinquency, incurs a FICO score hit.