What Is In It For The Banks
I understand how the short sale can benefit the seller. I don't understand what is in it for the bank? How does the seller deal with the banks on paying a difference? And if the bank turns in the loss to IRS as income for the seller on a 1099--does the seller know this before the short sale is complete?
Thanks for the help to all of the questions.
Banks (lenders) are in the business to make money... not to lose money, or, own real estate.
The act of foreclosing a mortgage is a costly, time consuming process.
In an effort to mitigate potential loss, AND keep bad loans from their books, the often encourage their delinquent/foreclosed borrowers to sell their homes in an effort to payoff the mortgage debt.
Sometimes, the amount owed exceeds the value of the home.
From a bank's perspective, sometimes it makes sense to accept a little bit less than they are due TODAY, then risk losing a whole lot more, TOMORROW.
Bad loans are an expensive, black eye to mortgage lenders.
[addsig]