By opting for short-sale instead of foreclosure the banks save time by a year or more. In USA it takes about 348 days for the foreclosure process to run its course; an extra 175 days are taken to sell the unit as per the calculations of RealtyTrac. In New York State the lenders have to go through court to start foreclosures. This leads to nearly four years for the process to be completed and sold as per theoretical calculations based on trends.
Lenders can forgive the debt – it is within their affordability and yet keep profit because the discounted loan has been bought from another bank said realtor Trent Chapman. He gives training to brokers and lawyers regarding negotiating with the banks about short-sale.
Considering this scenario banks are now so eager about short-sale that they are not only giving prior assent but are also offering handsome cash incentives in some cases. Chapman argues that the banks now want to quickly “get rid of bad loans”. It is less of a headache to give the green signal to short-sale; the relationship between borrower and lender also improves.
Wells Fargo in some instances is offering $20,000 for house owners to complete deals in short-sale. Its spokeswoman Veronica Clemens said via e-mail, “In certain states with extended foreclosure timelines, including Florida” short sale is encouraged.
Bank of America has dispatched to Florida house owners numbering 20,000 offering incentives of $20,000 even in some cases; the calculation is 5% of the loan due. The programme has shut down after last December. BofA has not decided whether to introduce this plan in other American states. Nearly 15% of the house owners had agreed to take part in it.
Citigroup has offered incentive to the tune of $3,000 to the majority of its eligible borrowers. However in individual cases the amount could increase said its spokesperson Mark Rodgers. He said, “Investor programmes have different guideline for relocation incentives, which we honour”.
Ally Financial did not in say anything in particular about incentives when questioned. Offers that come via e-mail cannot be talked over.
Referring to the move by Chase, realtor Chapman said, “It’s not really easy to identify the guidelines because Chase doesn’t tell you, they kind of tap you on the shoulder. When I first saw it in January 2011, I thought it was a joke or a typo. I was convinced it must say $3,000, not $30,000”.
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