Many people don't think that it's possible to make money doing a short sale, but lenders and the government have started offering programs to push homeowners to short sale in the form of cash incentives. There are many different cash incentive programs, and not all of them are offered by every lender, but your short sale professional will know which ones to try to qualify you for.
The most well-known program is the HAFA short sale incentive program. The government issued HAFA (Home Affordable Foreclosure Alternative) as part of the Making Home Affordable Program. Basically, if you qualify for HAFA and if your lender participates in HAFA, then you could receive up to $3000 at closing. In addition to this, the HAFA program also ensures that you're released from all deficiencies.
HAFA is offered through both Fannie Mae and Freddie Mac home loans, but the rules are different depending on who owns your loan. For example, the Freddie Mac HAFA program requires preapproval prior to having an offer on the property, while Fannie Mae does not.
An FHA Short Sale is another way that homeowners can get paid for doing a short sale. It only applies to FHA loans, so if you purchased your home using FHA money, then you may qualify for an FHA short sale. These are preapproved by HUD, and as long as you submit an offer that nets HUD at least 88% of the presently appraised value, then they will approve. The amount of cash that gets paid back to the seller in return depends on many things, and most people report receiving around $750 to $2,000 from HUD on an FHA Short Sale. HUD does have a requirement that you leave the home in good condition and close on time, also.
In addition to these two excellent cash incentive programs sponsored by the government, there are also many cash incentive programs from individual lenders as well.
Chase Bank (JP Morgan Chase) mortgage customers, as well as old Washington Mutual mortgage customers have been receiving ash incentives that range from $1,500 to $35,000! There is no way to track this data, and there are some unverified claims of receiving even more than that in exchange for doing a short sale.
Wachovia Bank, who owns many loans from previous mortgage companies like Golden West Financial and World Savings, offers these cash incentives as well. Wachovia itself was bought out by Wells Fargo recently, but Wachovia does continue to pay its mortgage holders for completing short sales as long as their specific criteria is met. The incentive amounts have been reported to range from $1,000 to $8,000.
If your mortgage is through Litton Loan Servicing, you may have already received a letter from them offering you a cash incentive. They are offering $3,000 to $5,000 for their mortgage customers to short sale, but they set steadfast rules and guidelines that must be followed strictly. These guidelines are easy for a short sale professional to abide by.
Citimortgage, a division of Citibank offers up to $35,000 to do a short sale. Citimortgage has been sending out letters to their mortgage customers in small quantities offering this.
Wells Fargo offers incentives of up to $20,000 to certain homeowners who opt for a short sale or who transfer a home title back to the bank. Wells Fargo also has a reputation for being one of the better lenders to work with on a short sale from a negotiation standpoint. This is because their systems are organized and they use an online management software that makes the phases of the short sale easy to track.
Bank of America is offering cash incentives to mortgage customers in amounts of $5,000 to $20,000 as part of their Florida Enhanced Short Sale Relocation Assistance program. Bank of America wants its homeowners to explore a short sale as a viable option for a distressed property, upside down mortgage or to avoid foreclosure. Bank of America has set forth strict eligibility guidelines as well:
Bank of America also excludes some customers, such as loans that are owned by Ginnie Mae, FHA, VA and USDA, as well as lot loans.
Navigating the waters of short sale relocation assistance and cash incentive programs can be difficult, but Kara Homes & Associates can help. We will process your short sale, find a buyer, submit the paperwork to your lender, and do our best to qualify you for all of these programs, meanwhile working to protect your credit and protect your remaining assets. Working with us costs you nothing! Contact us today and see how we can help you.