Short Sales - Savings to the Lender

Why would the lender want to do a short sale instead of foreclosing on the property ?

Here is a example why the Short Sale would be better for the lender.

Short Sale Senario                                                                                                  Foreclosure Senario

$110,000 Actual Loan Amount                                                         $110,000 Actual Loan Amount

$100,000  Actual Market value                                                         $100,000 Actual Market Value

   $8,000 Commission and Closing Cost                                               $1,500 Legal Fees

 $92,000 Amount left to Satisfy the lender                                             $4,500 Lost Interest

 ($18,000) Amount the Lender would discount the Mortgage                 $3,000  Taxes, Insurance, Maintanece & Utilities

                                                                                                               $8,000 Commissions and Closing Cost

                                                                                                              $83,000 Amount left to Satisfy the lender

                                                                                                             ($27,000) Loss to the Lender

By doing the Short Sale the Lender SAVINGS are $9,000

It can take 9 Months for a Foreclosure and Real Sale of the home

By the lender allowing the resale it also is a benefit to the borrower as they do not have a foreclosure on the credit and the do not have there name posted in the local news paper.