Ask Paul Wells

This is a very subjective question with a multitude of possibilities. First the ability to complete a short sale depends on a number of variables.

When a bank begins to initiate the foreclosure process it takes on a huge financial burden. The costs of taking a home from beginning to end in a foreclosure proceding is high and banks want to avoid it as much as possible. However that being said a banks willingness to accept a short sale can de very hard to read.

If the bank has a number of homes in foreclosure, more then their charter would allow, then the bank will be far more willing to look at a short sale then if there were few homes in foreclosure.

So all of this being said basically a bank will entertain a short sale when the loan goes into default and not before. From a banks standpoint why shold they discount a note that is current or just a month or 2 behind. Generally speaking the house must be in default for a bank to entertain a short sale.