Why would a lender agree to take a loss on real property?
A. Lenders are in the business of lending out money, not acquiring real property. They are required to keep their REO inventory below a certain percentage of their assets. When they foreclose and receive a property in their portfolio they work as quickly as possible to sell or turn it around. The foreclosure process is very costly. The lender will determine the current market value of the property and then contract with a real estate professional to market the property. Regardless of the amount originally owed, the home can only be sold at market value. Lenders can mitigate losses and reduce expenses by selling the property pre-foreclosure. Q.
