Mortgage lenders and bank servicing debt collectors make their money a variety of different ways. The 2 mains ways are through front and back end fees. Front end fees are items that they are charging up front such as an origination fee, processing fee, etc. Back end fees are fees that the mortgage company is making from charging a higher interest rate. Just because one lender is charging a higher rate than the other does not necessarily mean that they are making more money. Sometimes some lenders simply have better rates and pricing than other lenders. Consider 2 stores that sell the same item.
The same article, one of these items are sold for a dollar and sold another 1.25. This does not mean that the store selling the item for 1.25 is to make more money because the store that sells it for a dollar might be able to buy the product at a better price in general, because prearranged with the seller or buying other items in bulk.
The same can think mortgage lenders ( a little). Now, if the rates differ between the two lenders were absent , or 1 percentage point or more, then the lender is charging more interest is to make more money from the backend and demand a higher interest rate than they need . People are basically greedy and mortgage lenders are no different .
The same goes for a short sale of a home or commercial property. A collecting bank will not give you a short sale for less than the appraised value of the property. Each evaluator has the same Multiple Listing Service for the current market value of the property, the lender influences the result .
This filling of the current market value can be placed at a higher price for the properties that the assessor shall determine the assessment. When the creditor informs the evaluator who want a higher price, the ever review on this value and not the actual current market value based on the sale price and the actual market value.
The real estate agent has the same information as the assessor and is almost always a comparative market value less the assessor of the bank. So why is it sometimes $ 20,000 to $ 50,000 price difference ? It depends on the lender , director of the custodian bank or investors and holders of certificates of intangibles mortgages.
When the mortgage borrower is behind on the monthly payments, the administrator can make a sale instead of foreclosure. A short sale is when the bank manager that collects monthly payments for the owner and the holder of the note and mortgage sells the home for less than what is owed . Most of the time , the bank manager is not aware that the owner and the owner of the note and mortgage are to spend your mortgage payment.
A short sale , no matter if you 're late on the mortgage payment will appear as a foreclosure on your credit report and lower your credit score by hundreds of points. This will have a negative effect on your credit, but the number of points will lower is uncertain because there are many other factors that come into play in determining a person's FICO score . You probably wait 4-6 years after the events before they can qualify for another mortgage regardless of your credit score.
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