RSS

Lenders Providing Large Cash Incentives to Homeowners for Short Sales

13 Mar

In recent news, major publications including USA TODAY and CNNMoney have spotlighted the incentives provided by banks. These incentive programs, which offer anywhere from around $2,000 to upwards of $35,000, are intended to provide homeowners with the resources and motivation to pursue a short sale.

As banks look to ramp up short sales, such incentives are becoming more frequent. JPMorgan Chase began their incentive program last year, for example, and Bank of America (which plans a 60-70% increase in short sales this year) piloted a program in Florida this past December. Wells Fargo offers incentives as well, though primarily in states where the foreclosure process is particularly lengthy.

For banks, short sales can be a cheaper alternative to foreclosure. The foreclosure process is lengthy and costly, so much so that providing up to a $20,000 alternative for a short sale is still a cheaper option.

In USA TODAY’s article “Lenders paying borrowers to do short sales,” Jim Gillespie, chief executive of Coldwell Banker, is quoted as saying “It’s a lot cheaper to shell out $10,000 or $20,000 to someone than it is to go through a long foreclosure.”

In addition to the cost of the foreclosure process itself, foreclosed properties sell for less than short sales on average. According to the National Association of REALTORS®, foreclosed properties sold for 22% less than conventional sales, while short sales sold for around 14% less.

Advertisements
 
Leave a comment

Posted by on March 13, 2012 in Uncategorized

 

Tags: , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: