Posts Tagged chase
Bank of America is offering some struggling homeowners payments of up to $30,000 if they sell their homes in a short sale and avoid ending up in foreclosure.
Under the plan, Bank of America (BAC, Fortune 500) will offer homeowners so-called relocation payments of between $2,500 and $30,000 if they sell their home in a short sale. In short sale deals, the sale price of the home is less than what the seller owes the bank.
The bank first tested the payments in a pilot program in Florida last fall. Under that initiative, Bank of America paid up to $20,000 to borrowers who sold their homes in short sales.
“This program can help customers make a planned transition from ownership when home retention options have been exhausted or they have made a decision not to keep the home,” said Bob Hora, an executive for the bank.
Chase (JPM, Fortune 500) started a similar initiative in late 2010 that pays as much as $35,000 to short sellers. Wells Fargo (WFC, Fortune 500) has also paid five-figure incentives to short sellers or to owners who turned over their deeds to the bank.
BofA said it has completed 200,000 short sales over the past two years. These sales are generally more cost effective for banks than foreclosures. By avoiding foreclosure, the lenders get distressed properties back from delinquent borrowers more quickly, which helps them to avoid property tax payments, maintenance expenses and legal fees that can build up for months, even years, as foreclosures work through the system.
After several court decisions throughout the nation against JP Morgan Chase and GMAC Mortgage, the lenders have decided to halt foreclosure proceedings in 23 states including Utah. At question is their foreclosure process including accusations that they fabricated documents they couldn’t find to complete foreclosures on homeowners. Read more about it here:
An article in the Salt Lake Tribune gives (I think) some good advice for the new reality of the economy, including buying a house you can easily afford (which regardless of what FHA, Fannie Mae or Freddie Mac approve you for I always recommend doing), paying down credit card debt and saving for emergencies rather than relying on credit cards or lines of credit to take care of them. It really is going back to the old idea of savings, which until the past year Americans have had a negative saving rate. Read the whole article here: