Sunday, July 1, 2012

Lenders Paying Borrowers to Short Sale

Today let’s talk about lenders who are paying borrowers to short sale.
  
   
Anyone associates with West Sacramento Short Sales knows that a short sale saves the lender / investor money vs. foreclosure. Usually 20-25% in most cases. Two properties sold at the exact same price, one Bank Owned, one a Short Sale – the lender loses less on the short sale than the REO and that’s a fact. That is the major reason banks do short sales in West Sacramento.

So what about the stories we hear around Chase and Bank of America offering anywhere from $3000 to $45,000 for a borrower to complete a short sale? Are the stories true? The answer is yes. Of course there are stipulations and not all loans qualify.

In the case of Chase, the loans are usually old Washington Mutual sub-prime negative amortization or “pic a Pay” loans as they were referred to. These old WAMU loans more than likely are portfolio loans, meaning Chase still holds the note or they are loans where the documentation is so messed up that it is cheaper to pay the borrower to complete the West Sacramento short sale than risk further litigation if it forecloses. We personally have completed Chase short sales where the borrower received $10,000 to complete the short sale and the property only sold for $30,000.

As for the Bank of America program, theirs is a little more stringent. B of A requires the borrower to settle with the second lien holder on their own where normally B of A would make a contribution to settle the second – usually 6% of the unpaid balance. Now I have not personally completed a Bank of America Short Sale where the borrower received a payment at close of escrow but it is our understanding that those loans are old Countrywide loans of basically the same type and condition as the Chase loans where cash incentives are offered and for the same reasons.

The money is there and if you qualify it can be a nice windfall. For more information give us a call.

To get a better idea of when your West Sacramento home will be worth what you owe, log in to www.shortsaleandloanmod.info for a free estimate or call me today for a free no obligation consultation or for the latest West Sacramento short sale information. Call me today and sleep better tonight; you’ll be glad you did

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