During a short sale, minimizing time for the lender to respond is very important to preserving the clients credit. Frequently, the lenders may delay in their response or 1 out of the 2 loan holders (for that have a 1st and 2nd loan) may respond quickly while the other does not.

Usually a servicing lender may or may not be the owner of the loan, creating an increased delay in the response for a short sale approval. The loss mitigation functions are delegated to the servicing lender bu the servicing lender does not bear the risk of the loss. Under a provision of the TILA seasoned with a Section of the RESPA, you can find out the identity of the owner of the loan to make an appeal.

The objective of the servicing lender should yield the highest net value for the owner of the loan. If the short sale nets more for the first mortgage lender than a foreclosure, then a short sale should be accepted.