Lenders Providing   Large Cash Incentives to Homeowners for Short Sales

Posted: 26 Feb 2012 01:49 PM PST

For awhile now, we’ve instructed   agents on government incentives available to distressed homeowners who opt to   do short sales. Such programs include the Home Affordable Foreclosure   Alternatives (HAFA) program, which provides up to $3,000 to assist the   borrower with relocation fees.

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.

We’ve said it before, and we’ll   say it again: This year looks to be the year of the short sale. Make sure   you’re prepared!

  ]]> http://www.hiltonheadislandshortsales.com/Blog/?feed=rss2&p=37 0 http://www.hiltonheadislandshortsales.com/Blog/?p=30 http://www.hiltonheadislandshortsales.com/Blog/?p=30#comments Tue, 17 Jan 2012 20:23:46 +0000 BobRaehn http://www.hiltonheadislandshortsales.com/Blog/?p=30 I just received this article from the Distressed Property Institute and thought you might appreciate the read. I found it interesting.

Federal Reserve Recommends Short Sales Among Solutions to Housing Crisis

“On Jan. 4, Federal Reserve Chairman Ben Bernanke sent a letter and white paper to Congress outlining his insights and recommendations on restoring the health of the U.S. housing market.
Among the key findings on current market conditions:

• Housing prices remain 33% below their early 2006 peak
• Currently, 1 in 5 mortgage holders are underwater (12 million homeowners)
• In states with the price declines (i.e. Nevada, Arizona and Florida) roughly half of all mortgage borrowers are underwater on their loans
• The number of properties currently in the foreclosure process is more than four times larger than the number of properties in REO inventory

The white paper suggests that no single solution exists and that progress will come through “persistent and careful efforts to address a range of difficult and interdependent issues”—a position we have always stressed.
Among these efforts, the paper strongly recommends incentives for alternatives to foreclosure, namely a short sale or deed-in-lieu.
The white paper also emphasizes a fact we are all too aware of: foreclosures drive down property values in the surrounding area and lead to a “ripple-effect” that harms homeowners, lenders and taxpayers alike.

http://www.cdpe.com/blog/federal-reserve-recommends-short-sales-among-solutions-to-housing-crisis/

Chances are, you or someone you know in Hilton Head/Bluffton area is facing the possibility of foreclosure. But you need to understand that you are not alone.   Today, nearly 1 out of every 6 homeowners in America is behind on mortgage payments. These are tough and frustrating times. Now more than ever, it’s important to identify your options. Foreclosure can be avoided, your credit can be saved, and your financial future can be salvaged.

Contact Bob Raehn for more information on options that are available to homeowners.