Chase Bank Overdoes It With Cash Back Short Sale Incentive - reblog
You never know what to expect at closing these days on Short Sales, there is everything from the bank wanting to borrower to sign a note to them giving them unexpected cash for not making payments. We live in some unusual times, below is an interesting story about a short sale seller who got a sudden unexpected windfall. I am working on a Chase Short Sale right now, I hope my seller does well like this case.
When Chase started sending incentive solicitation letters to their borrowers in hardship early this year, many in the real estate industry were excited about the potential positive impact it could have. Sending letters to home owners offering $5,000 to as much as $35,000 BACK as a short sale incentive was a revolutionary way to get the borrower to take action and participate in a short sale. While this has certainly made a difference with some borrowers who can really use the money, unfortunately it rewards those who have made poor decisions and punishes those who are still responsible in many cases.
Here is just one of those cases. We just got a Chase short sale approval letter today from a local file in our Jacksonville, FL brokerage company. The purchase price was only for $60,000. The property and situation qualified for the HAFA program, and the borrower was excited about the possibility of getting $3,000 back to participate in a short sale. Short sale package was received and HUD was sent over showing a net to the lender of just over $47,000. After a short time of waiting and processing, we finally got an approval letter today. But something was different.
After reading the first page of the approval letter, it said that Chase was to receive only $37,000 back at closing. Instinctively, our initial reaction was that this must be some mistake, Until we read further. As it turns out, without the seller or their broker even asking for additional money back, Chase gave the borrower an additional $10,000 back. Including the HAFA program money, this seller will be getting $13,000 cash back short sale incentive at the close of their property. Here we have a borrower, who in one way or the other defaulted on his financial responsibilities, and was rewarded with more money than many will see at any one time in their lifetime.
I guess they are just giving defaulted borrowers a little taste of the wall street style executive bonuses that we have become accustomed to hearing about within the banking industry. Where is the justice in this? How is this fair to those who work hard to continue paying a mortgage that is more than the value of their property?
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