jtmortgagebanker

Loan Modifications: BofA Gets Taken to Court

Do you or anyone reading this know if the same requirement (buying the loan back at face value) applies to "short sales"? In this context, BAC may negotiate with the homeowner to reduce the principal of the mortgage if the homeowner sells the house. This is getting more common as the seller wants to get out but cannot pay off the full amount of the loan since the house is worth less than what they owe.

It seems lillogical for a lender to let a house go into foreclosure rather than accept a short sale but if this is the explanation, it would be economically rational.