Upcoming Foreclosures - Is it good for a sellers Lender to sell the house in short sale or move it to foreclosure ?

Is it good for a sellers Lender to sell the house in short sale or move it to foreclosure ?

I had put an offer for a short sale home and the sellers bankers(they have 2 mortgages). Not sure as if the lenders will accept the offer or not. 1)As far as lender is concerned does it make sense to accept OFFER during the short sale or move the property to foreclosure ? 2) Where do lenders make money ? or anything good for them

Public Comments

Mmm i would buy a house with that price
IDK
im sorry to say i was recently in your position. lenders MUCH prefer foreclosure. its all about making the most money for them. short sales are selling the home for under what is owed-foreclosure is selling the home what exactly what is owed (& sometimes higher). most lenders do not approve short sales because they are really only valuable to the seller of the home being that the bank loses money and the buyers typically get an as-is deal. goodluck. oh, btw-you could be looking at up to a 120 day answering period from the 3rd party. they will either wait the entire 120 days to see the highest offer or they will wait the entire period then decide to foreclose. short sales are a heartache!
Most of the time it is in the banks best interest to foreclose. But we do not know where this is, how much the property appraises for, if the loans are original or not, and how close to the appraised value your offer is. About 20% of short sale homes actually get sold and not foreclosed. 80% foreclose.
First off, getting 2 lenders (since there are two mortgages on this property) to agree on what kind of loss they want to take is like getting peace in the Middle East. Not going to happen. My prediction is this house moves to foreclosure.
1. It only makes sense to accept the short sale if they think the value of the house and your offer are close. If they think they can get more if the property forecloses, then they will foreclose. 2. They get tax breaks and/or insurance money. Before the bail out they also had an incentive to get rid of these properties before it got foreclosed on.