Who pays the difference in a short sale? - A quiz

Let's quiz your short sale knowledge! As we all know, a short sale is when the owner/seller needs to sell the property and it is worth much less than what's owed on the mortgage.  The lender/bank/lien holder okays (or doesn't) a short sale, whereby they get less money.  But who pays the difference?
a.  Nobody.  The bank(s) just eat the difference.
b. The seller pays.
c.  The buyer pays.
d. Casey Anthony.
e. Harry Potter.
f. a., b., and c.
g. a. or b. pays some of the difference.
h. a. and c. pays some of the difference
i. Both g. and h.
Blind and/or bored yet? Give up?
The answer is i.  Either the banks eat the whole difference or come after the seller for "debt settlement" which is a portion of the difference.  Increasingly, sellers are saying no, they won't pay anything and they refuse to be on the hook for the difference in the future. Instead, they'll let the house go to foreclosure.  So who steps up, or doesn't? That's right, the buyer. And no, dear buyer, you usually can't tack on that contribution to your loan.

Not to make this too complicated, but some short sale negotiators anticipate such a thing and get closing costs for the buyer negotiated up front.  That way, if the secondary lender/lien holder comes back and wants to be paid off, there's already an amount of money sitting there that can be used for this purpose.  Got it? I know it's confusing.

If you're a buyer, and you're considering making an offer on a short sale, it's useful for you to know some details going in.  These include how much is owed to the banks and other lien holders (such as county taxes or home owners' associations).  It's also good to know how many other lien holders there are -- the less, the better.  It is also helpful to know if the seller has assets, as the more assets the seller has, the more likely the bank is to come after them.  And the more likely they are to turn to you, dear buyer.