7Oct11 Bank of America Offers $20k Short Sale Incentive

Courtesy of The Palm Beach Post, comes some fresh news for Florida, offering up to $20,000 to short sale vs. foreclosure.

The limited time offer has received little promotion from the Charlotte, N.C.-based bank, which sent emails to select Florida Realtors earlier this week outlining basic details of the plan.

Only homeowners whose short sales are submitted for approval to Bank of America before Nov. 30 will qualify. The homes must have no offers on them already and the closing must occur before Aug. 31, 2012.

This signals, in our opinion, the pressure they are feeling in Florida as the housing market continues to languish and the continued pressure to clear up these loans that are facing imminent foreclosure. Other interesting facts in the article include the fact that the current foreclosure timeline is almost 676 days – almost two years!

“I think this is a positive sign that the bank is being creative to try and help homeowners and get things moving,” said Paul Baltrun, who works with real estate and mortgages at the Law Office of Paul A. Krasker in West Palm Beach. “With real estate attorneys handling these cases, you’re talking two, three, four years before there’s going to be a resolution in a foreclosure.”

Guy Cecala, chief executive officer and publisher of Inside Mortgage Finance, called the short sale payout a “bribe.”

“You can call it a relocation fee, but it’s basically a bribe to make sure the borrower leaves the house in good condition and in an orderly fashion,” Cecala said. “It makes good business sense considering you may have to put $20,000 into a foreclosed home to fix it up.”

Bank of America says that if the program shows promise in Florida, it could be expanded to other states. Other companies, including Wells Fargo and J.P. Morgan Chase also have similar programs.

More details:

Bank of America’s plan excludes Ginnie Mae, Federal Housing Administration and VA loans.

Similar to the federal Home Affordable Foreclosure Alternatives program, or HAFA, which offers $3,000 in relocation assistance, the Bank of America program may also waive a homeowner’s deficiency judgment at closing.

A deficiency judgment in a short sale is basically the difference between what the house sells for and what is still owed on the loan.

HAFA, which began in April 2010, has seen limited success with just 15,531 short sales completed nationwide through August.

In our opinion, this is just again a math decision a bank makes that falls in line with the bank’s decision. How does the bank minimize their lost? Short sale with a $20k kicker; or something else?

Post your thoughts in the comments!

 

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  • http://boise-real-estate-homes-houses-sale-short-sales-foreclosures-id.com/ Allisonbryde

    Interesting post, I am so glad that I have visited your site. Such a wonderful time reading this. 
    Boise Short Sales

  • http://twitter.com/Tewksbury_RE Kevin Vitali

    Here in Massachusetts the Massachusetts Supreme Court just had a ruling that will make buyers think twice about buying a foreclosed home.  Short Sales are starting to look like a better option for the homeowner, home buyers and the banks

  • http://Paris911.com paris911

    We have noticed the Junior Lien holders with the Short Sales we are handling here in California, starting to play harder to get.  They used to settle accounts for pennies on the dollar – now we are hearing nothing less than 75%…  Paris and I were thinking it is because of the new ruling where there is no recourse for the second to go after the Short Sale Seller if it sells short and they agree… What do you think?

  • ABA Acountant

    Thank you for the information on Short Sales! There are some tax implications your readers might find interesting.  They can learn about them here http://blog.avoidbeingaudited.com/2011/03/30/short-sales-and-tax-implications/ or here http://avoidbeingaudited.com/products_mp3_9_real_estate.html.

    Hope this helps your readers as much as you have helped me!

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  • Marieorlando

    Http://www.naplesshortsales.net Yes.. Bank of America extended the incentive until Decmeber 12th as long as you upload your listing into Equator before this date. 

  • http://amzn.to/ABCbloglink Daniel Milstein

    That is so true. As an author and business man, I can relate to how you said “Only homeowners whose short sales are submitted for approval to Bank of America before Nov. 30 will qualify”.I hope more people discover your blog because you really know what you’re talking about. Can’t wait to read more from you!

    • http://www.conservatories.tv/ J Armstrong

      And how could you relate to that?? I mean are you also facing a same situation?? if yes, the date is long gone!

  • Salt Lake Luxury Homes

    I think it is a great write and whatever they can do to help I believe to be fantastic!

  • http://www.BuildIdaho.com Trey Langford

    Very frustrating that people who make bad decisions are now getting $.

  • Pingback: What is the difference between a Short Sale Expert and a Short Sale Specialist — Santa Clarita REMAX Short Sale Expert and Santa Clarita Foreclosure News Team

  • karan samal

    nice blog.. hey, i have written a very good article on short selling explaining it with example 
    http://www.youngconcepts.in/2012/05/short-selling-how-to-make-money-during.html

  • Dwight Miller

    Update, on May 15, 2012, Bank of America announced a nationwide program paying homeowners up to $30,000 to do a preapproved short sale such as HAFA.  I guess the Florida program was successful so they’ve upped the ante.  Short sales must be initiated between May 3, 2012 and December 31, 2012 and only preapproved programs like HAFA are eligible, so do not submit an offer when initiating the short sale if you can avoid it.
    For a video and full details  http://azeasyshortsale.com/get-paid-up-to-30000-for-a-bank-of-america-short-sale/