It might seem counterintuitive, since they're taking a loss on the property, but a short sale is often a win for the lender in the end. Foreclosure is expensive, and a short sale can help the bank save money on the property. If the bank forecloses, it has to pay to evict the tenant, maintain the house and pay any taxes until the house sells. The property becomes a liability. Short selling not only takes that liability off the bank's shoulders, but it also keeps a foreclosure off the lender's records, making them look better. A short sale can make the best of a bad situation for the bank.