Short Sales - Savings to the Lender

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.