caa a22 4500 445316691 CHVBK 20180317142650.0 cr unu---uuuuu 170323e20110501xx s 000 0 eng 10.1007/s11146-009-9201-3 doi (NATIONALLICENCE)springer-10.1007/s11146-009-9201-3 The Optimal Choice for Lenders Facing Defaults: Short Sale, Foreclose, or REO [Elektronische Daten] [Terrence Clauretie, Nasser Daneshvary] When mortgage borrowers default and have no desire or ability to keep their property, then loss mitigation involves a sale of the property via one of the following options: (1) the lender allows pre-foreclosure "short sale” by the borrower, (2) the lender institutes the foreclosure process under a notice of default and the property is sold during the process by the borrower, and (3) the lender forecloses on the property, takes title, and sells the property in the market as real estate owned (REO). Sale of the property in the above three options is conducted by a motivated seller, either the owner or the lender, who desires to sell the property as quickly as possible. Thus, relative to a no-default sale, the house is most likely to be sold at a discounted price. It is generally expected that the discount would be lower in the case of a "short sale.” This option, however, may result in a longer marketing time, thus a higher total loss, than the other two options. We developed a model that allows simultaneous estimation of price and time-on-market effects of "short sales,” foreclosures, and REO options. We find that the short-sale option has the lowest-price discount, but significantly higher costs associated with marketing time. The pattern of price discount and marketing time reverses as we move to a sale while in the process of foreclosure and to a sale with an REO status. Springer Science+Business Media, LLC, 2009 Housing prices nationallicence Default nationallicence Short Sale nationallicence Foreclose nationallicence REO nationallicence Clauretie Terrence Department of Finance, University of Nevada Las Vegas, 4505 Maryland Parkway, 89154, Las Vegas, NV, USA aut Daneshvary Nasser Department of Economics, University of Nevada Las Vegas, 4505 Maryland Parkway, 89154, Las Vegas, NV, USA aut The Journal of Real Estate Finance and Economics Springer US; http://www.springer-ny.com 42/4(2011-05-01), 504-521 0895-5638 42:4<504 2011 42 11146 https://doi.org/10.1007/s11146-009-9201-3 text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1007/s11146-009-9201-3 text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Clauretie Terrence Department of Finance, University of Nevada Las Vegas, 4505 Maryland Parkway, 89154, Las Vegas, NV, USA aut NATIONALLICENCE 700 1- Daneshvary Nasser Department of Economics, University of Nevada Las Vegas, 4505 Maryland Parkway, 89154, Las Vegas, NV, USA aut NATIONALLICENCE 773 0- The Journal of Real Estate Finance and Economics Springer US; http://www.springer-ny.com 42/4(2011-05-01), 504-521 0895-5638 42:4<504 2011 42 11146 Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer