Why would a lender accept less than their payoff in order to facilitate a sale of the home? Why would a short sale be preferable to a lender than foreclosing on the subject property?
A. Foreclosure is an expensive process for a lender. Banks are in the business of making loans, in general they don’t want to possess the property. You also must remember that not only is foreclosure a long and arduous process for the bank but it also costs money. If the lender goes through the entire foreclosure process significant costs will accrue including posting the notice of foreclosure and advertising the foreclosure sale.
