Recent numbers have shown that over 25 percent of all United States home owners are underwater with their mortgages. What this means is that the home value has dipped below what the home owners have left to pay off on their mortgages.
In some cases a home that were purchased at $200,000 are now only worth $150,000 or sometimes even less. Many home owners have been faced with the necessity to sell their homes while they still owe more than what the home is worth. This is what is called a short sale.
The problem surrounding this type of sale is that many home owners are not aware of what tax obligations and loan deficiencies are associated with it. When this has been the case, many of the sellers are taking legal action against the real estate agents who did not properly inform them of the different requirements of short sales.