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Bank of America is offering to pay delinquent homeowners up to $30,000 if they sell their homes through short sale to avoid foreclosure.
The homeowners must start the short sale process by the end of this year and close the deal by Sept. 26, 2013, to be eligible for the incentive. The amount of assistance "will be determined on a case-by-case basis using a calculation that includes the value of the home, amount owed and other considerations," the bank says. The incentive starts at $2,500.
For now, the program is only available to borrowers who have mortgages that are owned and serviced by Bank of America.
To qualify for the incentive, "the seller must work proactively with the bank to obtain a preapproved sales price prior to submitting a purchase offer to the bank," according to statement by the bank.
Other large lenders, such as Chase and CitiMortgage, offer similar incentives on short sales.
It's good to see that banks finally get it. My sources tell me that lenders have been much more willing to accept short sale offers. Some are still taking long to process them but not as long as they used to. I've heard of short sales closing in less than 90 days, which is a big improvement compared to when lenders took a year to even reply to a short sale offer.
When banks allow borrowers to sell their homes for less than what is owed, they lose money. But they lose less than they would have lost if they had allowed the homes to go through foreclosure. Homeowners facing foreclosure benefit because a short sale isn't as bad for their credit as a foreclosure.
Have you tried to sell or buy a home through short sale? Please share your experience with us.
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Ass whole bank