Reason #1

Because they must avoid foreclosure at all costs – and here’s why. When a bank forecloses on a home it becomes a non-performing loan. This affects the amount of money a bank can borrow from the Federal Reserve.

Since banks only make money by borrowing from the Fed and lending to the public, they must borrow as much as they can. Every non-performing loan reduces the amount the bank can lend to the public, affecting their bottom line profits.

Reason #2

The bank knows if the property is foreclosed, it goes to auction and is sold for what is owed on the first mortgage and typically not a dime more. This leaves the second mortgage holder getting absolutely nothing.

Think about it – if you were in their shoes, wouldn’t you rather recoup something than nothing at all?