Posted by NJD on July 05, 2009 at 14:26:47:

In Reply to: Re: How much is too much for a short sale? posted by NJP on July 05, 2009 at 13:50:36:

A "soft note" is an unsecured loan which the lender would require the Seller to sign as a condition of permitting a "short sale"

For example, if you owe $300,000, but short sale offer is $200,000, with a shortfall of $100,000. The lender might agree to release its lien to permit the short sale, but not agree to forgive the remaining debt, and require the seller to agree to pay some amount over some period of time via a "soft note"

For borrowers with assets, agreeing to a soft note and payments might be a better alternative to getting a 1099-C

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