What is a Short Sale?
In a short sale, your bank or lender agrees to settle your loan for less than the amount you owe. Lenders have their own reasons for agreeing to a short sale, but in a nutshell, it helps them minimize their losses compared to a foreclosure.
Banks lose more money in a foreclosure because of lost interest, attorney fees, court expenses, eviction costs, selling costs, and property maintenance. And the longer the process draws on, the more money they lose. A short sale doesn't involve as much wait time, so they just get their money sooner. With a loan modification, lenders are able to continue to collect on their an investment, and would prefer a loan modification over a short sale
As a borrower, you can also benefit from a short sale. For one thing, you won't have to undergo the stress and embarrassment of a foreclosure, since it's a much faster process. It's also less damaging on your credit than a foreclosure, so you can get back on your feet faster.
In this age of financial crisis, even major lenders are forced to take offers they wouldn't have considered in better times. This allows us to easily negotiate better terms with your lender, whether you're after a short sale or a loan modification.
A short sale can work either way: it can help you get back on track or push you into even deeper crisis. The Loan Modification Department can help you weigh your options and make more informed decisions regarding your loan.
Before you agree to a short sale, here's something to note: over 80% of homeowners fail when it comes to negotiating with their lenders. However, the Loan Modification Department has a success rate of over 90% in terms of bank negotiations.