Why Do Banks Prefer Short
Why do Banks Prefer Short Sale
Why Do Banks Prefer Short Sale?
Banks as an institution are in the business of making money. They make money for you but mostly they are in the business for making a profit for themselves.
Recovering losses
With the slump in the market after 2007, it has been increasingly difficult to balance books. As more and more homeowners are finding it difficult to meet their mortgage payments, banks are incurring tremendous losses. Losing jobs, increasing expenditure is adding to the burden of homeowners and making its way towards loss for banks. After examining all the avenues letting go of the house to recover losses both for the bank and the borrower seems to be the only solution. If an individual is defaulting on payments, banks have to recover their losses the best way they can. Out of the various possible options short sale and foreclosure are two ways the bank can recoup its lost money.
Why Short Sale
Lets us be clear that bank does not want to own your house. Its sole goal is to get its money back. Bank short sale is a fast process both for the homeowner and for the bank. Banks are preferring short sale of properties these days due to many reasons. Since the primary concern is money, if a bank gets an offer close to the fair market value of the house, the bank will prefer short sale rather than foreclosure. There are many reasons for this which are discussed subsequently.
Time
The entire process of foreclosure comes with many long drawn out legal issues depending on the concerned State. Foreclosure is time consuming, as in certain states the whole legal process takes months to complete before bank can actually foreclose a property. Moreover, Banks have to hold the property for some more time to grant
