Short Sale Relocation Assistance Programs

Bank of America is testing the market with an incentive program for defaulting homeowners to “short sell” their homes instead of going through the time consuming and expensive foreclosure process.

Just five years ago, short sales were unheard of.  Why on earth would a lender accept less money than the value of the underlying mortgage?  The banks finally figured out that foreclosures come with incredible risk, lots of cost, maintenance and legal fees.  In Florida, Bank of America recently announced that it would give $5,000 to $20,000 to qualified borrowers who submit a short-sale request to the lender by Nov. 30.  The seller would be compensated if the house is sold by Aug. 31, 2012.  Short Sale Relocation Assistance Programs

Guidelines for Bank of America’s new Florida 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. Details: 1-866-272-4749.

These programs are always evolving.  There are no guarantees and your original loan documents as they relate to state laws rule.  If you’d like help through this process, please call me at 602.403.7799.   John

Short Sale Relocation Assistance Programs