When a homeowner sells their house for less than what's left on their mortgage, it's known as a short sale. Since the sale price does not cover the entire mortgage amount, this process needs the consent of the lender. Lenders frequently consent to a short sale to avoid the expensive and time-consuming foreclosure process. While the homeowner does not make a profit from the sale, they are relieved from the overwhelming debt, preventing foreclosure and potentially minimizing the damage to their credit score.