Banks Pay Short Sale Sellers $20,000 Incentives
Some of the nation’s leading mortgage lenders are payin sellers for short sale transactions as a alternative to foreclosure.
Wells Fargo says it has been making “enhanced financial relocation assistance offers” that can be as much as $10,000 or $20,000 to certain borrowers who choose to go through with a short sale.
This extra incentive is being offered to distressed borrowers in Florida and other states where the foreclosure process is lengthening, a spokesperson for Wells Fargo explained. The exact amount of the relocation funds provided to individual borrowers varies based on a number of factors.
Wells Fargo noted that this type of additional relocation assistance is only available on first-lien loans that the company itself owns.
JPMorgan Chase is also offering a range of incentives to borrowers that agree to a short sale “because if we can’t work out a modification, a short sale is a better result for the borrower, the servicer, the investor, and the neighborhood than a foreclosure,” the company said in a statement.
One agent in Florida confirms that he has indeed received a letter from Chase offering $20,000 to a borrower he’s representing in a short sale transaction.
Citi Bank has confirmed that its average short sale incentive offer is currently $12,000 for borrowers in cases where Citi owns the loan.
“Incentives are offered to customers experiencing financial hardship who need funds to proceed with the short sale,” a spokesman for the lender explained.
The amount, which is agreed upon upfront, varies according to the borrower’s individual circumstances and loan characteristics, Citi said. It is disbursed to the homeowner when the short sale is completed.
Bank of America says it is “committed to improving the short sale process” and has made procedural changes to cut some of the red tape for agents working with the bank on pre-foreclosure sales.
The lender now allows real estate agents to submit a short sale backup offer on a transaction if the original buyer has walked away from the sale.
This means that agents no longer have to initiate a new short sale if the buyer changes, Bank of America explained. Instead, agents can move ahead with the original transaction in the Equator system, BofA’s short sale technology platform of choice, and continue to work with the same short sale specialist.
Bank of America says this policy change will save its agents time by not having to repeat a number of process steps
Pending home sales increased in June
Pending home sales increased in June following a wide swing down in April and then up in May, according to the National Association of Realtors® (NAR). Month-to-month activity increased in the West and South but declined in the Midwest and Northeast. However, all regions show strong double-digit gains from a year earlier.
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The Pending Home Sales Index rose 2.4 percent to 90.9 in June from 88.8 in May, and is 19.8 percent above the 75.9 reading in June 2010, which was the low point immediately following expiration of the homebuyer tax credit. The data reflects contracts but not closings.
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“For the majority of transactions, the lag time between pending contacts to actual closings is one to two months. Therefore, the two consecutive months of rising activity should lead to overall improvement in closed sales in upcoming months,” he said. “Though a higher than normal cancellation rate can hold back final closing figures, it could well be that some past cancellations are nothing more than delayed buying decisions rather than outright cancellations.”
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Yun said tight credit and economic uncertainty have been constricting the market. “The best way to ensure a more solid recovery in housing is to simply return to normal, sound credit standards so more creditworthy homebuyers can get a mortgage,” he said.
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“Washington also should not rock the boat with policy changes that would negatively impact affordable credit or otherwise increase the cost of buying or owning a home,” Yun added.
Pending home sales in the South increased 4.4 percent to an index of 99.2 and are 19.1 percent higher than June 2010.
Existing-home sales this year are expected to total 5.0 million, slightly higher than 2010. Similarly, little change is forecast for aggregate home prices with several indicators, including NAR’s median prices, showing recent signs of stabilization.
Florida consumer confidence up in July
Florida consumer confidence up in July
GAINESVILLE, FL; according to a new University of Florida survey. UF’s monthly index rose two points in July to 68.
Four of the five components that make up the index increased or remained unchanged. The biggest improvement was in confidence to purchase big-ticket items such as cars and appliances, which rose five points to 77.
“Some of this may have to do with declines in gas prices during the month of June and much of July,” says Chris McCarty, director of UF’s Survey Research Center in the Bureau of Economic and Business Research. “This leaves more money in people’s budgets for other purchases.”
The other index components that rose were perceptions of personal finances now compared with a year ago, which increased three points to 57, and expectations of personal finances a year from now, which climbed one point to 75. Expectations of U.S. economic conditions over the next five years remained at 72. The only component to decline was perceptions of U.S. economic conditions over the next year, which fell one point to 59.
Another reason for the increase was improved confidence among seniors, which rose five points to 66. A decline recorded last month, McCarty says, was due in large part to seniors’ uncertainty over potential cuts to Medicare and Social Security. Although the federal government has not yet released its budget plans, the delay in reducing those programs may have led to a slight improvement. Seniors may also have learned that proposed entitlement cuts might not affect those in or near retirement as much as previously thought.
State unemployment was unchanged in June at 10.6 percent, ending five consecutive months of decline (national unemployment was 9.2 percent as of July 8). Home sales in Florida were down in June, but the median price for a single-family home ($138,000) in Florida increased for the fourth consecutive month.
The research center, part of the Warrington College of Business Administration, conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for June was collected from 414 responses. The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year. The lowest index possible is a 2; the highest is 150.
New Program Financial Assistance to Military Home Buyers
A new program offers financial assistance to first-time homebuyers who are veterans or active-duty military members.
Active duty personnel, veterans, retired members of the military and employees of the U.S. Department of Defense and the Department of Homeland Security may be eligible for a grant up to $5,000 to use toward down payments and closing costs if buying their first home. The grants can be applied to a mortgage issued by any financial institution.
“Members of the military often put off buying a home early in their careers because they’re moving around the country a lot,” says Kate Kohler, chief operating officer for the PenFed Foundation. “We want to make sure they have resources to add immediate equity into their home when they decide to buy.”
Requirements:
- Military affiliation – (active duty, reserve, National Guard or veteran) – a Department of Defense employee or a Department of Homeland Security employee.
- First-time homebuyer or not owned a home for the last three years; or a home has been lost through divorce or disaster.
- Gross household income, including allowances, used to qualify for a mortgage loan is a maximum of $55,000 per year, or 80% of a community’s median income based on family size.
To view eligibility requirements, visit www.pentagonfoundation.org/dreammakers.
Nationwide Real Estate Housing Prices Rose
Nationwide Real Estate housing prices rose 0.4 percent on a seasonally adjusted basis from April to May, according to the Federal Housing Finance Agency’s monthly House Price Index. Locally I would not say Real Estate prices rose, as you can imagine it's very hard to calculated if Real Estate "prices rose". I'm sure they average it but for example in Brevard County Florida we may sell 600 Homes in a month and a few million dollar homes sold one month can really skew the results making it seem like Real Estate prices went up.
What I do see are the good Real Estate deals are going away, in other words inventory has been drastically reduced from just 10 months ago. Even working in the Brevard County Real Estate market every day I'm frequently surprised to find so few homes when I research Real Estate for clients in certain areas of Brevard County Florida.