Some lenders have been offering cash incentives to strapped homeowners at risk of foreclosure to complete short sales and move out of their homes. Chase, for instance, has been quietly offering as much as $35,000 to homeowners who are “upside down” on their loans. In a short sale, the lender allows the sale of the home for less than the loan amount and often relieves the borrower of any further obligation. The incentives began late last year and are available nationally. The reason behind this incentive is to leave the home in better shape for resale. A short sale produces a better and faster result for the homeowner, investor and the community than a foreclosure.
Wells Fargo also offers relocation incentives for short sales as well as “deed in lieu of foreclosure”. The payments apply only to first-lien loans that Wells holds for its own portfolio. The amount varies, based on the loan balance and appraised value of home, but can be as much as $20,000.
The funds can be used by the borrower to cover expenses, like moving costs. Despite the incentives, some borrowers prefer to take their chances and stay in the home. The lengthy foreclosure process in some areas appears to have made some people complacent about the prospect of eviction.