Some people (incl. realtors) think that lenders make more money on foreclosures than from short sales or loan modifications. When loan modifications are denied, homeowners are trying to do a short sale. Having kept the property on the market for months, lenders turn over the short sale accounts to loan servicing companies. Some believe that these loan servicing companies make MORE money by letting the properties foreclose than to approve the short sales OR the loan modification.
The servicer is the only one the comes out ahead by taking a file all the way to foreclosure! The longer he gets to manage it, the longer he is paid.
The easy money policy by the Fed under Greenspan and by the lenders is the reason we're sitting here with all the inventory that's in default.
It would be best to have a law that would make lenders communicate with consumers and work together in solving their mortgage problems - it would be only fair because in any case lenders have been making money on the current homeowner in distress from the very start.
If you are thinking of putting your property on the market, seek help of a professional.
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