Chase has become one of the forerunners in the banking industry to pro-actively encourage homeowners who are delinquent on their loans to do a short sale.
They are offering large financial incentives to homeowners facing foreclosure to not just walk away, but to sell their homes for less than the amount owed, which is a short sale.
If you qualify, Chase will send you a letter stating the fact you may be eligible for a cash amount ranging from $10,000 to $30,000 by selling your home for less than the amount owed.
Sounds too good to be true—but it isn’t. I am currently negotiating a short sale for a client who has been offered $30,000 from Chase.
Of course, it’s not that black and white, and getting one of these letters is this key. This is a very streamline program, and Chase has its own analytical team, who specify which loans qualify. Once the loan has been accepted into the program, the homeowner will receive a letter with the incentive amount for which they qualify.
The program is offered only to homeowners with very specific loans. Part of the criteria is the loan has to be a portfolio loan. This is not for an investor or government-backed loan. Most of these loans also will be option ARMs/negative amortization or interest only loans. JPMorgan Chase inherited $4.1 billion in option ARMs when it acquired Washington Mutual.
Chase is not the only bank offering this kind of program. CitiMortgage also is offering their borrowers an average of $12,000, and it is expected Wells Fargo will follow.
So, why would a bank offer such large sums of money to a homeowner to do a short sale? There are several reasons why a short sale is in the bank’s best interest.
A foreclosure can be very costly and can take months to complete. Then, the bank owns the house, and is now responsible for the taxes, utilities, HOA fees and maintaining the property until it can be sold again. It can take months or even years from the time they start the foreclosure process to the time they actually get the house sold.
They want to get them off their books as quickly as possible so they can turn these bad loans back into cash again.
The banks are under scrutiny from the U.S. Attorney General on their foreclosure procedures, which led to the moratorium on foreclosures in 2010. There also are lawsuits being filed against lenders for originating these loans. Doing a short sale instead of a foreclosure will limit the banks’ risks of future fines and lawsuits.
For more information on this program, or to find out if your loan qualifies, please contact me. Call (602) 571-6799, or send an e-mail to Lorraine@ArizonaShortSaleToday.com. You also can visit the Web site at www.ArizonaShortSaleToday.com.