Why Does A Bank Consider a Short Sale?
The bank itself may be having problems due to the fact that they have a number of mortgage loans in arrears. It is easy to imagine how the bank would be worried about their investors and their board of trustees. The trustees do not want to lose any more than they already have, so they may insist on a fire sale of all the homes. If this was done all at the same time it could cause the prices to fall even more. The banks want to avoid that possibility so they are willing to negotiate with the current owner and facilitate a short sale.
