Industry News

Lenders to the rescue: Incentives driving short sales

Finding a win-win alternative to foreclosure

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When is the last time a banker called up a real estate agent, gave that agent a short-sale listing lead, then gave the seller thousands of dollars as an incentive at closing, plus thousands more from the Homeowner Affordable Foreclosure Assistance (HAFA) program, as a way of thanking the owner for not slipping into foreclosure? Realtor Mark Cooper, CEO of Re/Max Edge in the St. Louis, Mo., area, reported a short sale in which the "homeowner walked away at the closing with $28,000, with no recourse for selling his home with a $280,000 mortgage for $174,000." Bank of America, Citibank, JPMorgan Chase and Wells Fargo are reportedly among the lenders aggressively offering seller incentives. According to Tom Kelley, a spokesperson for Chase, this is beneficial for all parties. "Although (these distressed) sellers ... are not affected by the sales price, they have every motivation to keep the home in good repair, to work closely with the Realtor, and do what they c...