Two lending giants are reportedly offering home owners who are behind on their mortgage a cash reward to agree to a short sale in Florida
JPMorgan Chase & Co. and Wells Fargo & Co. aren’t releasing many details about the short-sale incentives, but defaulting home owners in Florida have confirmed that they’ve received anywhere from $10,000 to $20,000 from the banks in order to agree to a short sale.
To help home owners avoid foreclosure, banks have offered a “cash for keys” program, offering money in exchange for surrendering the home, but banks offering incentives for a short sale would be new, industry insiders say. Usually a the perception is that banks agree to do a short-sale transaction as almost a favor for home owners, experts note.
The banks won’t say why only some home owners are being chosen to receive the cash incentives, nor its criteria for choosing who gets it, only saying it’s determined by “individual circumstances,” according to the Florida Sun-Sentinel.
The short-sale incentives are a way for the two banks to write off the bad loans as soon as possible and avoid the lengthy process of foreclosure, experts say.
Wells Fargo says they offers the cash incentives to home owners in Florida and other states “where the foreclosure process is lengthening,” spokesman Tom Goyda told the Florida Sun-Sentinel.
In the first three months of 2011, the average foreclosure in Florida took 619 days, according to RealtyTrac Inc.
Source: “Chase Borrowers Getting Cash to Complete Short Sales,” South Florida Sun-Sentinel (June 27, 2011)