An article from the Press-Enterprise reports that banks are opting for more short sales compared to loan modifications and foreclosures.
A short sale was a term most people had never heard of just 5 years ago, but has become a main catch-phrase when talking about the currently housing market. Short sales offer many benefits to home owners, including a smaller impact on their credit score compared to a foreclosure. Short sales also offer benefits to banks, or the owners of the mortgage note.
Banks are in business to lend and invest their money. They are not in business to own, maintain, improve, and sell property. These are the roles they find themselves in after foreclosing on a home, and taking ownership. This article goes on to say that it costs the bank less money to allow a short sale, then foreclose on the home and sell it on the open market.
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