Short Sale Association of America

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Agents working together, professionally with distressed-mortgage homeowners.

Location: USA
Members: 13
Latest Activity: Apr 30

Why banks and lenders do not want to foreclose.

Foreclosure alternatives like short sales also benefit the Investor who purchased the loan. The Mortgage Bankers Association reports losses in excess of $50,000 on each foreclosed home, or as much as 30 to 60 percent of the outstanding loan balance. As soon as the Borrower stops making timely mortgage payments, Servicers and Investors start losing money.

Discussion Forum

Bank of America completed 100,000 short sales in 2010 !!

Bank of America completed nearly 100,000 short sales in 2010—more than double the previous year. In addition, BofA has consistently completed more short sales than REO sales every month for the last…Continue

Tags: housing, markets, estate, real, sales

Started by Mark Petrillo Jun 17, 2011.

Why banks and lenders do not want to foreclose. 1 Reply

Foreclosure alternatives like short sales also benefit the Investor who purchased the loan. The Mortgage Bankers Association reports losses in excess of $50,000 on each foreclosed home, or as much as…Continue

Started by Mark Petrillo. Last reply by Mark Petrillo Jun 5, 2011.

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Comment by Carol Ann Burnette on April 30, 2013 at 11:58am: If loan modification is not an option or has been denied short sale is the way to go. Banks are cooperating and getting your Short Sale approved. Just closed on a Short Sale for my client with Bank of America and it took 5 plus months .

Comment by Mark Petrillo on June 5, 2011 at 7:33pm

Lost servicing fee income: When the Borrower misses monthly mortgage payments and the loan is delinquent, the Servicer loses its monthly servicing fee.
Costs of collection efforts/servicing: The bank has to use additional resources to service delinquent loans when compared to current loans. The Mortgage Bankers Association reports the cost to Servicers on delinquent loans at three times the cost of servicing a current loan.

Comment by Mark Petrillo on June 5, 2011 at 3:55pm: Property maintenance: Until the Servicer can sell the property, they are responsible for lawn maintenance, securing the property, winterizing the property, and complying with local safety codes.

Comment by Mark Petrillo on June 5, 2011 at 2:57pm: Why Lenders want to avoid foreclosure?

Tax and insurance payments: The Servicer is also required to continue making tax and insurance payments on the loan, whether or not the Borrower makes their payment.

Comment by Mark Petrillo on June 5, 2011 at 2:46pm: Lost principal and interest payments. Most servicing agreements require Servicers to continue to send the Investor monthly principal and interest payments even when the Borrower misses payments. While the Investor is getting paid monthly, the Servicer is making payments out of their own pocket while the Borrower is in default.