Some lenders are now offering homeowners cash incentives up to $35,000 to do a short sale.
Many banks are overwhelmed with repossessed properties as the foreclosure rate has risen across America. These properties often require significant repair before being marketed and resold, costing the banks thousands of dollars. In many cases, it is to a bank’s advantage to release the lien through a short sale, rather than deal with the repair and resale of a property.
Bank of America currently has the most comprehensive incentive program, and is offering up to $30,000 release of remaining debt to encourage homeowners to do a short sale instead of allowing their home to go to foreclosure.
There are (of course) limitations…
· To qualify your loan must be owned AND serviced by Bank of America. Many loans are actually owned by other investors like Fannie Mae or Freddie Mac. (Click here to see if your loan is owned by Fannie or Freddie)
· You must qualify for and participate in one of the pre-approved price programs like HAFA or BOA’s proprietary Enhanced Relocation Program or Cooperative Short Sale Program. (Click here for more information on HAFA)
· The sale must be initiated in 2012 and close by September 26, 2013.
· The amount of the incentive is based on the appraised value of the home. Payments can range from $2,500 to $30,000.
· The incentive and forgiven balance will be considered income on your tax forms.
Other banks are developing similar programs as well –
Chase, Wachovia, Wells Fargo and CitiMortgage all have limited incentive programs for sellers who qualify. Hopefully these programs will be expanded soon throughout the country…
In sum, short sales still require patience and a strong stomach, but at least for some sellers there is now a payoff at the end!
To find out if you are eligible for a short sale, contact my office at 206-282-4848 and schedule an appointment today.