“When a modification is not possible, a short sale produces a better and faster result for the homeowner, the investor and the community than a foreclosure,”
Bank of America sent letters to 20,000 Florida homeowners as part of a pilot program, offering incentives of as much as $20,000, or 5 percent of the unpaid loan balance, Jumana Bauwens, a spokeswoman, said in an e-mail. The program expired in December, she said. About 15 percent of the homeowners agreed to participate in the program, she said.
borrowers would rather risk repossession while they wait for a loan modification, according to Guy Cecala
While I have heard this is happening, I have yet to come across a local homeowner who has received any similar letter offering them a cash incentive to seek a short sale. On the other hand I have helped homeowners sell their home using the HAFA program where they benefited by receiving $3,000 at closing to assist with moving and relocation costs. This was done as part of the negotiation/processing services I performed for the homeowner with their lender.
The article does state national statistics that 9% of all residential transactions were short sales for November 2011. Putting this in local perspective, In the Orlando area of Orange & Seminole County.. Short Sales that actually sold equalled 39% of the 1796 sales that took place. For all of 2011, short sales that actually sold equalled 31% of all sales. (REO’s = 33% for 2011)
Depending on how you handle the situation and how you prefer the situation to be handled, an actual foreclosure in the Orlando area can take up to 2 years to process through depending on the lender or lenders involved. This leaves some homeowners with time to attempt the loan modification if they wish of simply go straight to the attempt of a short sale. It should be noted that I believe a short sale a much more viable opportunity than a loan modification but with new media play regarding potential loan modifications who knows? I wouldn’t hold my breath though!
If you or someone you know is considering their options and has missed a mortgage payment or is near missing payments then please have them give me a call. I will be happy to discuss what options they may have. Remember when they sell their home through a short sale, the lender pays my fee and if the home doesn’t sell for any reason then no fee is due.
here is a link to the full article: http://www.bloomberg.com/news/2012-02-07/banks-paying-homeowners-a-bonus-to-avoid-foreclosures-mortgages.html