Get your calculator out.    I recently closed on a short sale where the seller walked out of closing with a check for $15,000 and $3,000.  The home sold for $25,000.  The commission for both sides was $1500.  Title companies got paid a little and the recording fees were paid.  A check was sent to Chase Mortgage for a little over $3000.  The math worked, but just did not make much sense. 

When I received a call in May from Chase Mortgage to list a home that they had the loan on and that the owner did not qualify for a modification, I quickly accepted and quickly got the home on the market.  While meeting with the seller, they mentioned they had received a letter from Chase stating that if they place the home on the market and sold it, Chase would pay them $15,000.  My initial response was that they someone had sent them a letter to try to scam them in some way.  They produced the letter for me and I called Chase.  Chase confirmed that they sent the letter and that it was true.  Chase was going to pay them $15,000 upon a successful short sale!

We listed the home for $35,000 and quickly sent the listing documentation to Chase, as they were one day from a foreclosure.  We were able to get the foreclosure postponed.  An offer was obtained and Chase accepted the offer (BTW, Chase short sale department was excellent with the speed at which they worked this short sale).  We closed the property yesterday at a sales price of $25,000.  The seller received a $15,000 check form Chase and a $3,000 check from HAFA.

The sellers were ecstatic and are getting a new start on life.  I will not go into their story, but I pray that they can use this money wisely and get back on their feet again.  My paycheck will get my kids some new shoes as school starts back next week.  But my question is, what did Chase get out of this.  I do not see how the math adds up for them.  I believe the seller incentives on behalf of the mortgage companies could do a lot for the short sale market and keep more foreclosures off the market.  But $15,000 on a $25,000 property.  When all was said and done, Chase received a check for just over $3,000.  That probably did not even handle the cost of the servicing that took place on the loan during the short sale process.

Oh well, I am going to put my calculator up.  I am not sure what Chase will get out of this, but a few things that I know will come out of this transaction......My sellers will get a new start on life and a home that is in bad need of repair is going to get a major uplift.  There will be some job opportunities as the home is rehabbed.  The new and improved property will make for some happier neighbors as it will make a better looking neighborhood and hopefully a move towards increasing the property values in the neighborhood.  An investor will put some money into the economy as he purchases supplies and pays his crew of handymen.   Someone will begin to pay rent on this home or a real estate transaction may take place if he chooses to "flip" the home.  And, Dick's Sporting Goods will close on three new pairs of shoes next week.