By Ryan Jackson
Bank of America, which has performed more foreclosures than any other single U.S. lender is raising the amount of money it pays delinquent homeowners to agree to a short sale. The program will pay any where from $2,500 to $30,000 in relocation assistance to qualifying mortgage holders.
The program is hoped to produce a larger number of short sales, which the bank agreed to as part of the $25 billion settlement with the 49 state attorney generals in the robo-signing scandal. BofA completed an estimated 200,000 short sales in the last two years, according to bank officials.
“Bank of America is committed to providing alternatives to foreclosure whenever possible,” said Bob Hora, home transition services executive for Bank of America. “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.”
At first the incentive program will be offered across the U.S. on mortgages that are owned and serviced by Bank of America. The program is based on a similar incentive offered to Bank of America customers in Florida last year.
BofA anticipates greatest response to the program will come from borrowers in especially hard hit states, including California, Nevada, Arizona and Florida.
To qualify homeowners are required to work with the bank to obtain a preapproved sales price prior to submitting a purchase offer. A short sale must be initiated by the end of this year and close by September 26, 2013 to be eligible for payment. Qualifying short sales that have already been started but have not closed may be eligible.
The amount of assistance provided under the new program will be determined on a case-by-case basis using a calculation that includes the value of the home, amount owed and other considerations.