In many states, short sales of homes are increasing in numbers, becoming a higher percentage of home sales overall. In a short sale, a mortgage lender allows the homeowner to sell their house for less than the homeowner owes to the bank on the mortgage. Often, but not always, the lender will forgive the balance on the mortgage after a short sale.

A short sale is not an ideal arrangement for either the homeowner or the bank. Both lose money. The advantage for both, though, is that they will not lose as much as they would in a foreclosure. That is why the number of short sales is rising. The banks tried foreclosing on everyone left and right, and it made the housing crisis worse for everyone. Even the banks are now willing to try a different approach.

So why aren't the banks allowing short sales all the time? Not all homeowners qualify, and not all offers made in short sales are enough to satisfy the banks that they could not do better in foreclosure. However, the trend indicates that banks are looking on short sales in a much more favorable light than they did even a few years ago.

For example, the nation's largest mortgage servicer, Bank of America (BofA) is planning to do 100,000 short sales this year. In 2009, they did only around 50,000. Foreclosures (by all banks, not just BofA) are still in the hundreds of thousands per year, but at the very least, short sales are trending in a positive direction.

If a short sale can be closed, everyone does better than they would in a foreclosure, including the neighborhoods where the properties are located. Fort Lauderdale mortgage option attorneys advise clients that are in danger of foreclosure to look into all available short sale options.

Source: USA Today "Number of short sales on the rise" Aug. 28, 2011