Why Do Some Lenders Reject Short Sales?

Published On: May 16, 2017|Categories: Real Estate|

why do some lenders reject short sales

Lenders aren’t under any obligation to approve a short sale—and often, they don’t.

So what’s the deal? Don’t the banks want to sell these houses to avoid a bigger loss?

There’s no simple answer to this question; sometimes they do, and sometimes they’re willing to take a gamble.

Why Do Lenders Sometimes Reject Short Sales?

There are plenty of reasons a lender would reject a short sale, including:

  • The offer price is too low. Banks typically request an appraisal, and the listing agent should include a comparative market analysis to show why the offer price is justified. The lender doesn’t have to agree.
  • The seller doesn’t qualify for a short sale. The seller needs to create a hardship letter to explain why they’re asking for debt forgiveness, but the lender doesn’t have to accept it.
  • The buyer doesn’t qualify for the purchase. Like any other home purchase, the buyer must qualify under their own lender’s conditions.
  • The bank sold the loan. Sometimes the bank that originally held the mortgage sells it; in that case, the lender doesn’t have the authority to approve the short sale.

Are You Looking for Short Sales in Tampa’s Suburbs?

If you’re thinking about moving to Tampa, check out the links below to search for homes with just one click:

When you’re ready to start looking at homes for sale in Hillsborough CountyPasco County or Pinellas County, we’re here to help.

Call us at 727-584-8480 or 813-961-6000. If it’s easier, get in touch with us online. We’ll begin searching for your new home right away.