Some of the nation’s leading mortgage lenders are paying sellers for completing Short Sale truncations rather than seeing a property go into foreclosure.
Wells Fargo says it has been making “enhanced financial relocation assistance offers” that can be as much as $10,000 or $20,000 to certain borrowers who choose to go through with a short sale.
This extra incentive is being offered to distressed borrowers in Colorado, and other states where the foreclosure process is proving to be lengthy, a spokesperson for Wells Fargo explained. The exact amount of the relocation funds provided to individual borrowers varies based on a number of factors.
Wells Fargo noted that this type of additional relocation assistance is only available on first-lien loans that the company itself owns.
JPMorgan Chase is also offering a range of incentives to borrowers that agree to a short sale “because if we can’t work out a modification, a short sale is a better result for the borrower, the servicer, the investor, and the neighborhood than a foreclosure,” the company said in a statement.
Delroy Gill of MRD Team with RE/MAX Professionals confirms that he has indeed received a letter from Chase offering $20,000 to a borrower in a short sale transaction and spoken with Chase Bank to confirm its details and legitimacy.
Citi Bank has confirmed that its average short sale incentive offer is currently $12,000 for borrowers in cases where Citi owns the loan.
“Incentives are offered to customers experiencing financial hardship who need funds to proceed with the short sale,” a spokesman for the lender explained.
The amount, which is agreed upon upfront, varies according to the borrower’s individual circumstances and loan characteristics, Citi said. It is disbursed to the homeowner when the short sale is completed.
Bank of America says it is “committed to improving the short sale process” and has made procedural changes to cut some of the red tape for agents working with the bank on pre-foreclosure sales.
The lender now allows real estate agents to submit a short sale backup offer on a transaction if the original buyer has walked away from the sale.
This means that agents no longer have to initiate a new short sale if the buyer changes, Bank of America explained. Instead, agents can move ahead with the original transaction in the Equator system, BofA’s short sale technology platform of choice, and continue to work with the same short sale specialist.
Bank of America says this policy change will save its agents time by not having to repeat a number of process steps.