Susan Halverson

Real Estate updates on Clermont FL Properties

‘Secret’ Short Sale Reward in Florida? June 28, 2011

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)



Home affordability is at an all-time high. The
median mortgage payment on the median priced
home as a percentage of the median household
income is lower than it’s been in a generation.

Mortgage rates are at rock bottom. It’s hard to
imagine interest rates going much lower, and
when they start to inch back upwards, monthly
payments and total loan costs will spike upwards.

Sellers are motivated. This means that buyers
have the upper hand! From banks looking to
dispose of foreclosed properties to homeowners
who are fiercely competing among an excess of
housing inventory, buyers have untold choices and
negotiating power.

Financing is readily available! Banks are back
in the game and ready to lend to well-qualified

Owning vs. renting is increasingly favorable.
Since 2009, the average principal and interest
payment has fallen below the average rental rates,
and the gap is now wider than it’s been in the past
22 years.

Homeownership is still at the core of the
American Dream! Owning a home is critical
to financial stability and wealth building. It’s
a forced savings account, a place to live and a
fabulous tax deduction.



Most homeowners policies cover lost or damaged possessions. Typical coverage ranges from 50 percent to 70 percent of the amount of insurance you have on the structure of your home. For example, if your policy provides up to $250,000 to rebuild your home, you could get an additional $125,000 to $175,000 to replace your belongings.

Again, though, there are different levels of coverage. You can insure belongings for their actual cash value, or the replacement cost. Actual cash value means what it says: If you lose a 10-year-old TV, your payment would be based on the value of a 10-year-old TV. Replacement cost coverage would get you enough money to buy a new TV.

Replacement coverage costs about 10 percent more, but it’s worth it, Salvatore says, because most household items depreciate quickly.

All homeowners should do an inventory of their belongings to figure out how much insurance they need and make it easier to file a claim, Salvatore says. Store a record of your inventory on a secure website, in a safe deposit box or with a relative or friend.

The Insurance Information Institute offers free home inventory software. The National Association of Insurance Commissioners also has information.