If you are a Seller who has been thinking about Short Selling Your Property - READ THIS!
Bank of America is testing foreclosure waters with an incentive program for defaulting homeowners to “short sell” their homes instead of enduring a foreclosure, which can take years.
Almost unheard of five years ago, a short sale must be approved by the lender because the sale amount winds up being less than the mortgage owed on the house. Foreclosures have come to cost lenders so much in terms of sunken prices, deteriorated properties and legal fees that Bank of America announced last week that it would give $5,000 to $20,000 to qualified borrowers who submit a short-sale request to the lender by Nov. 30. A seller would be paid if the house is sold by Aug. 31, 2012.
“It’s an incentive for people who are delaying foreclosures or who are in a foreclosure process,” said Alan Randel, broker/owner of AmeriTeam Realty Inc. “They stop paying their mortgage, and it can take a year of or more. … This is an opportunity to get cash out and be relieved of the deficiency.”
Guidelines for Bank of America’s new Enhanced Short Sale Relocation Assistance program state that a borrower may use the incentive to pay off existing liens or for relocation expenses. FHA, Ginnie Mae, VA and USDA loans are not eligible. Details are available by calling 1-866-880-1232.
Short-sale incentives are an outgrowth of earlier, “cash for keys” programs offered by lenders and real-estate companies. Also, the U.S. Treasury Department has tried to boost the number of short sales with its Home Affordable Foreclosure Alternatives program, which provides $3,000 for borrower-relocation assistance, $1,500 for servicers to cover administrative and processing costs, and as much as $2,000 for investors who meet certain requirements.
Other programs currently available:
•Wells Fargo offers incentives of $10,000 to $20,000 to certain homeowners who opt for a short sale or who transfer a home’s title back to the bank. The program is aimed at properties in Florida and other states known for protracted, judicial foreclosures. The money is available only on first-lien loans that the company owns, which is about 20 percent of its portfolio. Details: 1-800-678-7986.
•JPMorgan Chase has not reported how much it offers for short-sale incentives, though real-estate agents have reported sellers getting $20,000. The lender also has declined to specify how it determines the amount of its incentives. Details: 407-248-3945.
•Citibank has reported it offers an average of $12,000 for borrowers when it owns the mortgage. The amount is determined upfront and varies depending on a borrower’s financial circumstances and mortgage-payment history. The money is disbursed when the short sale closes.
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