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« BP Oil Spill Gives Myrtle Beach Property Management A Boost In Tourism | Home | Banks Watching For Strategic Defaults Closely »

Why Would A Bank Carry Out A Short Sale?

By Vic Hurlstorm | August 21, 2010

Short Sale Shift

Welcome to shortsaleshift.com. Minnesota’s top short sale experts, Josh Pomerleau and Sarah Willman are going to discuss why a bank would want to complete a short sale.

One of the initial comments we get from property owners that are going through foreclosure or starting to miss their payments is “Why would a bank choose to do a short sale?”. Often times the house owners think that it simply sounds to good to be true. But, there are many reasons why a lender would fancy a short sale over foreclosure. At the end of the day, it saves the bank lots more cash to progress through a short sale than to proceed through a foreclosure.

There are lots of negative costs associated with foreclosing on a property. There are lawyer fees. Lots of times the home owner will leave the house. When that occurs, the lender has to worry about people breaking into the house and pilfering stuff. In addition, the general maintainence of the home is neglected. There are also instances where house owners will damage their home because they are offended with the lender taking their home from them.

The bank looks at it like this. It is a good deal less possible that the home will be damaged when they complete a short sale. It gives the house owner a sense of closure by not losing their house. Then the property owner can move on under their own control.

Also, the bank will have to insure the house from all types of scenarios such as tornados and other natural disasters. Those costs are also unconstructive to the bank.

At the end of the day that is why the bank would aspire to close a short sale. The lender also needs to close on the house sooner than they could with a foreclosure. Getting that money from a short sale allows them to turn around and loan that cash out again. So, the time value of cash is worth quite a bit to the lender.

Through the short sale process, data show that the bank will obtain greater money from a short sale than they will from a foreclosure.

Minnesota Short Sale Shift can answer your questions. We are Minnesota’s Foreclosure Avoidance and Short Sale Specialists.

Get more help from short sale Realtors, Josh and Sarah, at Short Sale Shift presented by the Short Sale Specialists of Minnesota

Topics: foreclosures | No Comments »

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