Why Would My Lender Approve a Bank Short Sale?

Q: Why would my lender approve a bank short sale?

A: A bank short sale can save the lender money while benefiting all involved.

In many metro Atlanta, Gerogia neighborhoods, short sales are on the rise. And for good reason.

A bank short sale is a win-win-win-win situation when a borrower is in an upside-down position in their mortgage yet must sell, or if the borrower simply can no longer continue making the mortgage payments for any number of possible reasons.

A four-way win? Yes.

In short sales, the seller is relieved of the home they cannot afford and the lender avoids a costly foreclosure and resale proceeding. That’s two winners. The third winner is the new buyer, who purchases the home at an attractive price. The fourth winner is the local community that avoids the downward pressure on home values that results from foreclosed properties.

Plus, the whole transaction brings the U. S. real estate market and the general economy one home sale closer to recovery.

Banks are not in the real estate business.

They are in the money-lending and money-making business. Therefore, in a distressed property sale situation, they will usually choose the option that returns them the most net dollars.

Ostensibly, banks do not like excess inventory and bad loans on their books; therefore, if they see an opportunity to approve a short sale without a huge loss, they will ususally try to do it. There are many fees and expenses involved in foreclosing and reselling real property. Lenders know they could lose a lot more money and time if the property goes to foreclosure than if they approve a short sale today.  So, it is usually in the bank's best interest to accept a reasonable and fair market short sale offer.

Win-win-win-win! And you, the home seller, get relieved of all or a portion of your mortgage debt with your dignity and credit-worthiness relatively intact.

Go short sale!