Does anyone has excel calculation sheet to compare foreclosure vs. short sale which one will net the lender more money?   I have heard that many many times from the negotiators.  They have a formula to calculate either short sale or foreclosure will give them more money.  If foreclosure will give them more money they will deny the short sale ( because they will get paid from the MI).  If short sale generate them more money they will approve the short sale.  where can I get the calculation comparison between foreclosure vs short sale?   I know each bank is different but don't they have a general guideline ? 


Any thought?   Thank you. 

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There is no formula for short sales vs foreclosure.  The numbers that are used is that it cost's between 25,000 to 50,000 to foreclose on a property. The major decision for the lender is to determine current market value and each will do its own calculaions to determine if it is more cost effective  to do short sale or foreclose. One of the  issues currently is getting an accurate market value the majority have been inflated which gives the lenders incorrect data to make there decision.

The other wild card is that the servicer is paid to facilitate the foreclosure/REO process so the servicer is giving up a lucrative income stream when they approve a short sale.
Inflated list prices? Doesn't make sense because the idea is to get the house sold. In our area (So. CA) short sales list prices are right on current market value or slightly lower. With BPO's, comps from listing agents, and appraisals, how in the world would there be inflated list prices for short sale listings?
I have heard as well that especially in investor circles there are charts to show this.  How in the world you can calculate things like vandalism risks, theft risks, property deteriation, and countless variables is beyond me...  But I have heard of such a comparison form out there.
Lenders do use internal calculations to determine if a short sale is a better option than a foreclosure.  It is called loss severity.  However, I don't know of any way to calculate this accurately since there is no way to know what the MI company is offering to the loan investor for short sale versus foreclosure.  Also, loss severity alone is not enough since mark to model accounting allows the banks to keep properties on their books at inflated prices thus delaying the booking of their actual loss.  This can sometimes lead to a bona fide short sale offer being declined.

Hi Kendra! I do have a form that was emailed to me when a negotiator from Citi and I were going back and forth on a gazillion revised HUDs as we were having a "spirited" convo about net proceeds. He sent me something that is not on excel but it does shows a side-by-side comparison of the following columns: 

REO / Deed In Lieu / Short Sale Projected / Short Sale Actual / Modification 


I'd be happy to share with you and anyone who's is interested. However it will take someone who is pretty savvy on excel to convert it so we can share for best practices and tips in negotiating. You can email me at


Thanks for bringing this up as I had forgotten about it :)





Hi Sharon,


Thank you soooo much.  I have sent you an email already.  In case if you don't get it.  here is my email address,   Thank you. 

Hi Sharon,

I would be delighted to receive a copy from you at

As a former Loss Mit Neg we did have a worksheet (with formula) that we used to calculate a short sale vs a foreclosure - I will see if I can get a copy.  And yes, sometimes it is more beneficial to foreclose than to short sale.

Hi Cindy! As soon you find a copy, may i kindly have a copy as well? Thank you :)


I just shot off an email to my contact - will let you know - b they may or may not let me have a copy since it is "their" form but it doesn't hurt to ask!!

Hi Cindy,


Thank you very much.  Would you mind also email me one?




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