When a bank has decided to take less then the mortgage amount this called a short sale. The reason this happens is normally the borrower of the loan for whatever reason is no longer able to make there payments. The house is normally worth less then what is owed on the loan. The other options the lender may try to do with the borrower may be lower the interest rate of the loan, add back missed payments to the end of the mortgage or waive late fees.  If these options don't work the lender will then try to find a buyer an see how much of the loan amount they can recoup.

A lack of income of the borrowers may make the options of loan modifications work out for the borrower to stay in his home. Foreclosure is an expensive process for the banks. Normally the homes condition after the house has gone through the foreclosure is in very poor shape making the value much less. By the bank working a short sale this will eliminate the legal cost foreclosure. The length of time that it takes to buy and close on a short is at least twice as long as a normal closing anywhere from 4 to 9 months. So by doing a short sale instead of a foreclosure the bank will end up with more money based on the house being able to be sold for more without the added cost of foreclosure.

If you would like more information on what is available in short sale or bank owned propertie go to www.CainandCompany.comand go to our Bankowned tab.