Why would a lender agree to a Short Sale?

1. Asset Management. If the bank forecloses on your house they are going to have a vacant home that needs to be sold and may be a target for vandalism. By working with you on a Short Sale, they get the house sold, while you are still living there maintaining the property. Even if you are not still in the property, working on the Short Sale allows your Realtor® to do some of the work they would have to do in marketing the property for sale.
2. Banks are also under some pressure from the government to show that they are making efforts to assist homeowners. There are incentives to both the lender and the homeowner to work on a Short Sale.
3. Ability to lend. From the time you stop making your mortgage payment to the time the house gets sold, the bank has to report your loan as a non-performing asset which affects their ability to make new loans. A Short Sale can help get a bad loan off their books much faster than the foreclosure process.