On May 15, Bank of America announced its new Short Sale Assistance Program to help financially distressed homeowners avoid foreclosure.
This was a pilot program in Florida, which they are now expanding nationally as part of the $25 billion settlement. Under the new program, qualified homeowners would receive a cash sum at closing, from $2,500 up to $30,000, to help with relocation expenses. The amount payable depends on the value of the home, the amount owed, as well as other criteria not yet released.
Unlike regular short sales, the program has specific requirements as to how and when the short sale package is submitted to the bank. It is so important for the Realtor to understand not only the eligibility requirements needed for the homeowner, but the listing requirements for the home, as well. If it is not originated correctly by the Realtor, the homeowner would not be eligible to participate in the program, regardless if he qualifies or not.
This is a limited time offer. The short sale has to be initiated prior to Dec. 31, and must close by Sept. 13, 2013.
With the Mortgage Debt Relief Act set to expire on Dec. 31, homeowners, who need to do a short sale, or are trying to decide if a short sale is the right option, need to act now to help ensure it closes by Dec. 31. The Mortgage Debt Relief Act allows you to exclude the cancelled debt from taxes on purchase money or home improvements. Once this has expired, the deficiency cancelled during a short sale will become taxable income.
This is not the only new program announced recently by Bank of America.
Loan Modification Principal Reduction
They just released a program whereby they have reached out to 200,000 homeowners, who may qualify for a principal reduction.
Mortgage to Lease Program
This is a pilot program whereby distressed homeowners can lease back their home from the bank. The program only is available in three states, Arizona, New York
and Nevada. Currently, it only has been offered to 20,000 homeowners. If successful, they plan on expanding it nationally.
These programs are part of the $25 billion foreclosure settlement agreed to earlier in the year (the full details of this settlement will be in next month’s article).
New programs are encouraging short sales and helping to avoid foreclosure. Lenders are finding creative ways to help homeowners who have done a short sale purchase a new home in as little as one day after the short sale closes. Therefore, the year 2012 looks set to be the Year of the Short Sale.
There is no cost to the homeowner to do a short sale.
Contact me today at Coldwell Banker Trails And Paths to find out if you qualify for up to $30,000 in relocation assistance. Call (602) 571-6799, or send an e-mail to Lorraine@ArizonaShortSaleToday.com. You also can visit the Web site at www.ArizonaShortSaleToday.com.
For more information on this program and other programs offered by the government and the banks, please visit my Web site or contact me directly for a free confidential consultation.