Short Sale SellersLenders Prefer Short Sales to Foreclosures
More and more mortgage lenders are realizing that short sales are the way to go to avoid high costs in foreclosing properties.
In today’s market lenders are realizing that they are losing more when going through the foreclosure process due to the high costs in filing documents in court, sending notices, selling through auctions or foreclosure listings, the time taken to foreclose on the house (especially if the homeowner uses legal measures to delay the process and allows them to stay in the property longer for free).
Once a mortgage lender has agreed to a short sale, they will agree to accept a full payment that is lower than the mortgage balance. They will take a loss, but it will be lower than if a foreclosure took place.
According to Fair Issac Corp, handler of the FICO credit score, a short sale will damage your credit score but not as much as a foreclosure.
Short sales have soared across the country by as much as 20 percent in the last 6 months. With some banks, like Wells Fargo, short sales have tripled in the last 18 months.