When is a short sale the bank’s better option, with regard to the disposition of the loan on my property?

When a lender deems that all other options are either too costly or carry with them a high level of financial uncertainty, the short sale represents closure and finality.

Lenders also often favor short sale resolutions because they are not in the business of, nor do they have expertise regarding, managing or owning properties. Moreover, short sales are typically less expensive for the lender than the foreclosure process.

or more information on short sales I recommend this article: Short Sales Q&A’s