Short Sale Attorney Serving Nassau County and Long Island

When keeping your home is no longer the right outcome, a short sale gives you a controlled exit — selling the property for less than the outstanding mortgage balance, with the lender's approval, and in many cases, a full waiver of the remaining deficiency. It is not the same as foreclosure, and for homeowners who qualify, it is almost always the better option. Additionally, when properly negotiated, the lender will pay your legal fees, realtor fees, transfer taxes to NYS and pay you moving expenses to vacate your property.


Aronow Law P.C. handles short sale negotiation and closing representation for Nassau County and Long Island homeowners, within the same foreclosure defense engagement — without requiring a separate closing attorney.

Short Sales Avoid a Foreclosure Judgment on the Public Record   •   Banks Lender Deficiency Often Waived as Part of the Short Sale Agreement   •   Aronow Law Handles Both the Defense Negotiation and the Real Estate Closing   •   Nassau County and Long Island Short Sales Handled for 23+ Years   •   Free Consultations With No Time Limit

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Filing Chapter 7 stops a wage garnishment immediately through the automatic stay. But if the garnishment stems from a judgment creditor, the underlying judgment remains on the record until it is formally avoided or discharged. Aronow Law handles the full resolution — not just the filing.



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If you have a suspended vehicle registration alongside your debt issues, that can also be addressed as part of the same engagement.

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What a Short Sale Is — and How It Works in New York

A short sale is the sale of a property for less than the outstanding mortgage balance, completed with the lender's approval. The lender agrees to accept the sale proceeds as full or partial satisfaction of the loan, and in many cases, agrees to waive the remaining deficiency — the gap between the sale price and what was still owed.



The homeowner sells the property through a conventional real estate transaction. The difference is that the lender must review and approve the sale terms before closing can proceed, and that approval process — including deficiency waiver negotiations — is where legal representation matters most.


In New York, attorney representation is required at real estate closings. Aronow Law handles both the short sale negotiation with the lender and the closing itself, so clients do not need to coordinate a separate closing attorney during an already stressful process.

Short Sale vs. Foreclosure vs. Deed-in-Lieu: How the Three Compare

Homeowners facing an underwater mortgage or an unsustainable payment have three primary exit options. Understanding how they differ is the starting point for choosing the right one.

Short Sale

The homeowner sells the property on the open market, with the lender's approval, for less than the mortgage balance. The sale price is negotiated between the buyer and seller; the lender then reviews and approves or counters the terms. A properly negotiated short sale includes a deficiency waiver — meaning the lender agrees not to pursue the homeowner for the remaining balance after closing. Credit impact is significant but generally less severe than foreclosure. The homeowner retains some control over the timeline and the terms.

Foreclosure

The lender initiates a court action — required in New York — to force the sale of the property after the borrower defaults. The homeowner loses the property through a process they do not control, at a sale price determined by a public auction that frequently produces less than market value. A foreclosure judgment becomes part of the public record and typically carries the most significant and longest-lasting credit impact of the three options. In New York, the lender may also pursue a deficiency judgment for the remaining balance after the foreclosure sale, depending on the circumstances.

Deed-in-Lieu of Foreclosure

The homeowner voluntarily transfers the deed to the lender in exchange for release from the mortgage obligation, without going through a foreclosure proceeding or a sale. This avoids the public foreclosure process but requires the lender's agreement and is typically only available when the property is unencumbered by other mortgages or liens, and must be delivered vacant of any tenants. Lenders are often reluctant to accept a deed-in-lieu when there are junior liens, HOA arrears, or title complications — all of which are common in Nassau County properties. The credit impact is substantial but generally comparable to a short sale rather than a full foreclosure.



For most homeowners in Nassau and Suffolk County with a single mortgage and a property that can be sold, a short sale is the most controlled and least damaging exit available.

When a Short Sale Makes More Sense

Than Other Options

A short sale is typically the right path when:


  • The homeowner owes more than the property is currently worth and a sale at market value would not cover the full mortgage balance
  • Keeping the home is not the goal — due to a job relocation, divorce, health situation, or a decision to downsize
  • The homeowner's income cannot support even a modified mortgage payment, making a loan modification an unlikely outcome
  • A foreclosure judgment on the public record would cause disproportionate professional or financial harm
  • The lender has indicated willingness to consider a short sale as part of the mandatory settlement conference process


Aronow Law evaluates whether a short sale, a loan modification, or another foreclosure defense strategy is the right fit at the outset of every engagement — based on the homeowner's financial situation, the property's value, and the specific lender's history with each type of resolution.

The Deficiency: What Happens to the Balance After the Sale

The deficiency is the amount remaining on the mortgage after the short sale proceeds are applied. On a $400,000 mortgage where the property sells for $320,000, the deficiency is $80,000. Whether that balance follows the homeowner after closing depends entirely on what was negotiated with the lender before the short sale was approved.


A short sale without a deficiency waiver exposes the homeowner to a collection action on the remaining balance — which defeats a significant portion of the benefit of the short sale over foreclosure. Negotiating a full deficiency waiver is a core part of what Aronow Law does in every short sale engagement. Lenders do waive deficiencies, particularly when the short sale is properly structured and the financial hardship documentation is presented correctly. But that outcome requires negotiation — it does not happen automatically. Additionally, you want to know how to offset the 1099 that you will receive from the lender which can dramatically create a tax liability for that filing year.

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Frequently Asked Questions About Short Sales in New York

  • What is a short sale in New York real estate?

    A short sale is the sale of a property for less than the outstanding mortgage balance, completed with the lender's written approval. The homeowner sells the property at market value — or what the market will bear — and the lender agrees to accept those proceeds as satisfaction of the loan. In a properly negotiated short sale, the lender also waives the remaining deficiency, releasing the homeowner from any further obligation on the mortgage after closing.

  • Do I need an attorney for a short sale in Nassau County?

    Yes — New York requires attorney representation at real estate closings, so attorney involvement is not optional. Beyond the legal requirement, short sale negotiations with lenders are complex and the deficiency waiver language in the lender's approval letter is the most consequential document in the entire process. An attorney who understands both foreclosure defense and real estate closing law is positioned to negotiate better terms and protect the homeowner through both phases of the transaction.

  • What is the difference between a short sale, foreclosure, and deed-in-lieu in New York?

    A short sale is a voluntary, negotiated sale of the property below the mortgage balance, with the lender's approval — the homeowner retains some control over the process and the terms. Foreclosure is a court-ordered process that the lender initiates and controls, ending in a public auction with no input from the homeowner on price or timing. A deed-in-lieu transfers ownership directly to the lender without a sale or court proceeding, but requires lender agreement and is rarely available when other liens exist on the property. For most Nassau County homeowners, a short sale produces the most favorable exit when keeping the home is not the goal.

  • Will a short sale affect my credit?

    Yes. A short sale will appear on your credit report and will cause a meaningful drop in your credit score. However, the impact is generally less severe and shorter in duration than a completed foreclosure — particularly because a foreclosure judgment becomes part of the public record in New York in a way that a short sale does not. The precise credit impact varies by individual credit profile and lender reporting practices. Aronow Law addresses the credit implications as part of the overall strategy discussion during your consultation.

  • Can I do a short sale while a foreclosure is already in progress?

    Yes. A short sale can be pursued while a foreclosure action is pending — and in many cases, lenders will pause the foreclosure timeline while a short sale application is being reviewed. The mandatory settlement conference process under CPLR § 3408 often provides a structured framework within which a short sale can be proposed and negotiated while the foreclosure is stayed. Acting before the foreclosure proceeds to a sale date preserves the most options.


    Additionally, under federal RESPA regulations, if we submit a complete short sale package 45 days prior to a scheduled sale date, then the lender MUST review and respond to the short sale application.


Ready to Understand Your Exit Options?

If you are carrying more mortgage than your home is worth, or if keeping the property is no longer the right decision, a short sale may be the most controlled and least damaging path forward. Aronow Law serves Nassau County and Long Island homeowners from the firm's Woodbury, NY office, handling both the lender negotiation and the closing. The consultation is free and has no time limit.