Usually a creditor-driven legal process
The lender may seek to sell the home after default. The homeowner may lose ownership; dates and procedures vary.
Foreclosure and short sales are not the same thing. Learn what each means, how a home's market value may affect the conversation, and when an independent appraisal can help you make a more informed decision.
UNDERSTAND THE DIFFERENCE ↓Independent valuation services · No promises about foreclosure or lender decisions
When mortgage payments become difficult, you may hear words like delinquency, default, foreclosure, short sale, and loss mitigation. They are related, but they do not mean the same thing. And knowing the difference matters before making a major housing decision.
The lender may seek to sell the home after default. The homeowner may lose ownership; dates and procedures vary.
The owner generally markets the home and finds a buyer. The mortgage holder must agree to the short payoff and terms.
Both can involve financial consequences. A short sale is not simply a regular sale at a bargain price.
Suppose your mortgage payoff is $280,000, but the home could sell for only $240,000. You are potentially “underwater.” That's where a short sale might enter the conversation—but a lender must approve the transaction, and costs or other liens can increase the shortfall.
Illustration only, not a property's appraisal, payoff quote, or calculation of legal liability. A deficiency may remain unless addressed by applicable law or written agreement.
A foreclosure is a legal process—not the first missed payment. For many covered residential mortgages, federal servicing rules generally delay the start of legal foreclosure until the loan is more than 120 days delinquent, with exceptions. After that, the actual process and timeline depend on state law and the loan.
Fees, notices, and attempts by your servicer to contact you may begin. This is the time to request help, not wait for the last notice.
Depending on your circumstances, the servicer may evaluate a repayment plan, forbearance, loan modification, short sale or another alternative.
If the matter isn't resolved, the creditor may proceed under applicable law. Notice, sale, and post-sale rights vary by jurisdiction.
If payments are behind—or a sale date is approaching—contact your mortgage servicer, a HUD-approved housing counselor, or a qualified attorney promptly. An appraisal does not stop the foreclosure clock.
The name doesn't refer to how quickly the property sells. It refers to a sale in which the proceeds fall short of the amount needed to pay the mortgage debt, and the appropriate mortgage holder agrees to the transaction.
Request the servicer's short-sale or loss-mitigation procedures and required documents. Approval standards depend on the loan and investor.
Typically, an owner works with a real estate professional to market the home and seek a qualified buyer. Other lienholders may need to approve.
The servicer reviews the proposed sale and financial terms. Confirm whether any deficiency is released or waived, and consult legal and tax advisers.
Remember: A short sale generally means you sell and leave the home. It is not the same as a loan modification that allows you to remain in the property.
Both foreclosure-related and short-sale decisions can involve disagreement or uncertainty about real estate value. A credible appraisal helps explain the value of the property—not the outcome of the debt negotiation.
Independent research considers property characteristics, condition, relevant comparable sales and local market conditions.
A written appraisal identifies the effective date, assignment conditions, scope and supporting analysis.
Owners, attorneys and other authorized parties may use an appropriate appraisal when reviewing proposals, property condition, or value disagreements.
Important: Lenders and servicers often obtain their own appraisals, broker price opinions or other valuations. A private report ordered by a homeowner may not be accepted. Ask first.
When appropriate, a privately ordered appraisal can help owners understand their property's potential market value while consulting a servicer or professional adviser.
Homes with deferred maintenance, needed repairs or atypical features may benefit from carefully developed property-specific valuation evidence.
Attorneys and other clients may request a current or historical value for an identified purpose. We review feasibility and scope before accepting the assignment.
If a bank requires a valuation through its own approved ordering channel, ordering a report directly from TVA may not meet its instructions.
We understand that people facing foreclosure-related decisions need useful information—not dramatic promises or pressure. TVA's job is to form an independent value opinion consistent with the agreed scope and applicable professional standards.
Relevant sales, market conditions and property details help inform the appraisal process.
Our valuation conclusions follow the evidence. We cannot tailor a value to secure lender approval.
We discuss intended use, access, timing, fees and whether your proposed appraisal is appropriate before moving forward.
Ask about loss-mitigation options, deadlines, required documents and whether they require their own valuation.
Talk with a HUD-approved housing counselor, attorney or tax professional as appropriate, especially regarding deficiencies and foreclosure dates.
Share the address, property condition, intended use, effective date and any instructions so we can determine whether the assignment is suitable.
The questions homeowners frequently need answered before making the next move.
No. One missed payment is a serious reason to contact your servicer, but it generally does not mean your home is immediately scheduled for a foreclosure sale. Federal and state requirements, exceptions, and your loan terms control the process.
Short sales generally arise when the expected net sale proceeds will not cover the mortgage payoff and related obligations. The servicer must evaluate and approve the proposed transaction.
It means you owe more on your mortgage than the property is currently worth. Your property value and outstanding payoff are separate figures.
No. An appraisal can help you understand or document property value, but it does not halt deadlines, compel a lender to accept an offer, or prevent a foreclosure sale.
Not necessarily. The servicer may require its own appraisal, broker price opinion, or other valuation. Confirm its process before paying for a private report.
A well-supported independent report can provide additional market evidence for discussion or review. The lender or other decision-maker determines what evidence to accept.
Condition can affect market value. Depending on the scope, an appraiser analyzes observed or reliably documented condition and relevant comparable sales. The report should reflect appropriate assumptions and limitations.
Possibly. A short sale does not automatically release you from the unpaid balance. Ask an attorney and servicer about deficiency liability and insist on written terms.
It may have significant credit effects, but the result depends on credit history and how the account is reported. An appraisal does not determine credit reporting.
Tax consequences can arise and exceptions may apply. Have a qualified tax adviser review the specific facts before agreeing to terms.
Contact your servicer and a qualified housing counselor or attorney promptly. Time-sensitive legal and loss-mitigation rules may apply. Do not wait for an appraisal before seeking help.
No. TVA provides independent valuation opinions for an agreed intended use. We cannot promise a particular market value, short-sale approval, deficiency forgiveness, or foreclosure outcome.
Learn more from the CFPB short-sale guide, foreclosure timeline guidance, and housing counselor directory. Educational information only; not legal, tax, housing-counseling or financial advice.
If you or your adviser have confirmed that an independent appraisal is appropriate, tell True Value Appraisal about the property and your valuation needs.
ORDER AN APPRAISAL →An appraisal cannot delay foreclosure, guarantee a short sale, or release debt. For urgent mortgage help, contact your servicer and a HUD-approved counselor promptly.