BofA offering up to $30K for short sales

by 15 May 2012

NEW YORK (CNNMoney) -- Bank of America is offering some struggling homeowners payments of up to $30,000 if they sell their homes in a short sale and avoid ending up in foreclosure.

Under the plan, Bank of America (BAC, Fortune 500) will offer homeowners so-called relocation payments of between $2,500 and $30,000 if they sell their home in a short sale. In short sale deals, the sale price of the home is less than what the seller owes the bank.

The bank first tested the payments in a pilot program in Florida last fall. Under that initiative, Bank of America paid up to

[caption id="attachment_6930" align="alignright" width="275" caption="Bank of America"]Bank of America Halts Mortgage to Fannie Mae[/caption]

$20,000 to borrowers who sold their homes in short sales.

"This program can help customers make a planned transition from ownership when home retention options have been exhausted or they have made a decision not to keep the home," said Bob Hora, an executive for the bank.

Chase (JPM, Fortune 500) started a similar initiative in late 2010 that pays as much as $35,000 to short sellers. Wells Fargo (WFC, Fortune 500) has also paid five-figure incentives to short sellers or to owners who turned over their deeds to the bank.

BofA said it has completed 200,000 short sales over the past two years. These sales are generally more cost effective for banks than foreclosures. By avoiding foreclosure, the lenders get distressed properties back from delinquent borrowers more quickly, which helps them to avoid property tax payments, maintenance expenses and legal fees that can build up for months, even years, as foreclosures work through the system.

Read full article from CNN Money

COMMENTS

  • by Wendy G Brown | 5/16/2012 3:56:18 PM

    This is really great news! There are so many distressed homeowners' who will get a fresh start. These incentives will change alot of lives.

  • by Maggie | 5/16/2012 11:33:38 PM

    Bank of America relocation up to 30K will be great in a short sale for distress owners.
    This will give a new beggining of the owners in distress. We need to know if the short sale representative
    from the banks will be willing to offer this amount....I hope they will and not only news....and only the
    friends from the bank will get it....Is so much disonesty in the short sale procesing...but will see.....

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