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Wednesday, January 16, 2013

BofA enhances short sale incentive up to $30,000

BofA enhances short sale incentive up to $30,000

Did you get a “Golden Ticket” from Bank of America?
The nation’s largest mortgage servicer has officially released its Enhanced Relocation Assistance program in California, six months after it deemed a pilot run of the program in Florida a success.

Bank of America sent letters and overnight packages to some lucky homeowners last week, a windfall equivalent to receiving a mythical ticket to Willy Wonka’s Chocolate Factory. A client of Dream Big Real Estate received a notice that they qualify for the program, which will provide them up to $30,000 after they complete a short sale on their home.

“Bank of America is reviewing all current, in-process preapproved-price short sale agreements to determine who is eligible for this limited-time offer,” according to a statement from Bank of America. “Eligible homeowners actively participating in a preapproved-price short sale program (such as HAFA or Bank of America’s proprietary program) will receive a letter if they qualify for the additional relocation assistance.”

Here are some program details:

The enhanced program is only available for preapproved-price short sale programs, which are initiated without an offer from a buyer. Officials said it may be extended to other programs in the future.

The amount of the relocation incentive is based on the appraised value of the home. Payments made to the homeowner at the close of a short sale range from $2,500 to $30,000.

The incentive can be used to help pay off junior liens, including credit cards judgments, utility liens and tax liens.
The short sale must be initiated in 2012 and close by Sept. 26, 2013.

Homeowners will receive a 1099 form from Bank of America for the unpaid balance and the relocation incentive, and it should be included when they complete their next tax return. (Consult with your CPA or tax attorney to determine if you have a tax liability after a short sale.)

Unlike other high-dollar relocation-incentive programs, Bank of America’s enhanced program allows homeowners to raise their hands and volunteer. Want to know if you qualify for the Enhanced Relocation Assistance? Call our office today at 951-778-9700 and we’ll do the research for you.

Bank of America isn’t the only institution offering relocation incentives after a short sale. Below are a few other programs:

HAFA PROGRAM: More than 20,000 short sales have been completed through the federal Home Affordable Foreclosure Alternatives program, which provides a $3,000 relocation incentive for the homeowner.
The U.S. Treasury version of the program this week increased the amount allowed to satisfy junior liens to $8,500, making the program a better alternative for California homeowners, who are more likely to have high-balance home-equity loans.

Many banks participate in this program, though not all homeowners fit the mold.

WACHOVIA: Wachovia Mortgage has been providing relocation incentives of $2,500 to $10,000 in a short sale for more than a year. The lender is well-known for its speedy response and no-nonsense negotiations.

CHASE BANK: This lender offers relocation incentives up to $45,000. Not all Chase loans qualify for the incentive — To find out if you have one of these loans, call us today at 951-778-9700.

CITIMORTGAGE: Citi says its average short sale incentive offer is $12,000 in cases where Citi owns the loan. The incentives are based on a variety of factors, including level of distress of the homeowner and loan characteristics.

WELLS FARGO: Wells also completed a trial program in Florida last year that offered $10,000 to $20,000 to a homeowner who completes a short sale or deed-in-lieu. The incentive is only available on first trust deeds that Wells itself owns, the lender said.

This is not a comprehensive list, but these are good examples of the programs available to homeowners who are in danger of losing a home to foreclosure.

Despite what you may have heard, banks prefer short sales over foreclosure or even loan modifications. Why? It’s all about the numbers.

Short sales net banks 12 percent to 25 percent more than they would gain from a foreclosure because of the time and expense to take back, repair, maintain, market and resell a property. And as many as half of loan modifications redefault within the first year, later turning into foreclosures and short sales.

Thus short sales continue to increase, especially in Southern California, as lenders streamline processes and create attractive offers to help distressed homeowners. A short sale allows a homeowner to avoid a financially devastating foreclosure, limit damage to their credit, and re-enter the housing market much more quickly as an able buyer — before home values again shoot through the roof.

More importantly, a short sale allows a homeowner to exit their house on their own terms, with dignity intact.
Want to know if you qualify for any of these programs? Call us today at 508-699-2500 Ext 11.

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