Between foreclosures and short sales what is the best option for a residential borrower who is just too far behind to ever be able to pay the bank to reinstate their loan? Well there is quite a bit of difference between foreclosures and short sales. A foreclosure is the banks last line of defense for seizing a secured asset due to nonpayment of a loan they issued that secured the property. But banks hate seizing homes because they lose tons of money rehabbing the property and marketing it to the public, especially when nobody is really buying homes per say. So foreclosures and short sales are both last resorts. A short sale is when a homeowner lines up a buyer and sells the home for less than is owed to the bank, allowing them freedom from their debts and allowing the bank to recover most of their money while minimizing losses. Never accept that your home can go into foreclosure; you can always pursue a short sale foreclosure and at least try to save your credit rating.
