A: A lender may offer to "release" its security interest against the property in exchange for less than the total amount of the note. A release will allow the property to be sold without paying off he obligations of the note. However, the note is not satisfied.
• Advantages: a successful short sale will allow the property to be sold and thus avoid a foreclosure.
• Disadvantages: The remaining debt on the property (also called a deficiency) still exists. You are still liable for the note -- in other words, you still owe the money.
• Reality: It is not likely the lender will pursue the deficiency unless you have other significant assets.