Banks have discovered that it is better to give than to receive. Receiving a home through foreclosure has proven expensive for the lender. According to Freddie Mac, an average foreclosure costs a bank $60,000. Instead, bottom-line sensitive institutions are giving cash incentives to encourage homeowners to cooperate with a short sale. A short sale is a sale in which the bank agrees to let a house sell for less than the amount of their outstanding loan.
- Bank of America is offering 5k-30k
- Chase is offering 10k-55k on their older WAMU products.
- Wachovia and Wells Fargo Financial: 5-15k
In addition, the Home Affordable Foreclosure Alternatives (HAFA) program provides $3,000 in relocation assistance at the close of an FHA short sale.
Don’t Sell Yourself Short
The summer market has been sizzling and one surprising beneficiary has been sellers who had assumed they were in for a short sale. Some recently listed “short sales” have received multiple offers. Through the miracle of competition, the price has been driven up enough in some instances to bridge the loan gap and turn the short sale into a traditional sale. This is great news for sellers’ resulting credit. Don’t assume your house is underwater. The tides are turning.