According to Chase, customers who are in financial trouble and are underwater and have no way to pay their mortgage may be paid up to $35,000 to do a short sale. The bank tells Call 12 for Action that a foreclosure can cost banks big bucks because they can drag on for years. Short sales are more cost effective for banks and less damaging on a homeowners credit.

Wells Fargo and JP Morgan Chase haven’t made any official announcements about the initiative, but indebted homeowners have reported that the two companies have offered them cash incentives of anything between $10,000 and $20,000 to sway them into opting for a short sale. Experts say that the new short sale incentives are the most practical method for both banks and homeowners to get out of a sticky situation – the homeowners avoid foreclosure, while the banks get to write off bad loans, avoiding the need to foreclose, which can be a lengthy process, averaging 619 days according to the latest figures from RealtyTrac Inc.
source Foreclosure News

The nation’s leading mortgage lenders are extending extras for short sale transactions employed as an alternative to foreclosure – both in the form of monetary incentives for borrowers and streamlined procedures for real estate agents.
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 or transfer the title back to Wells via a deed-in-lieu.

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, the company says.

Wells Fargo noted that this type of additional relocation assistance is only available on first-lien loans that the company itself owns – which represent only about 20 percent of the loans Wells Fargo services. The company must follow investor guidelines for the remaining loans it services.

JPMorgan Chase is also offering a range of incentives to borrowers that agree to a pre-foreclosure 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.

Chase says the amount of the offer “depends on a number of factors” but declined to share specific details on how much money it’s been providing to short sellers.

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.

Another agent in California says he closed a short sale with Chase where the borrower was paid $30,000 at closing for cooperating with the short sale.

“I have closed over 200 short sales and this was the most I have seen paid to a borrower,” the agent said.

Citi has confirmed that its average 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 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.

ORLANDO, Fla. – Oct. 20, 2011 – Florida’s existing home and existing condo sales continued their upswing in September, according to the latest housing data released by Florida Realtors®. Existing home sales increased 10 percent last month with a total of 15,036 homes sold statewide compared to 13,723 homes sold in September 2010, according to Florida Realtors.

“One of the most overlooked statistical trends in all of real estate is the growth in home sales, both single-family and condo, in the state of Florida,” said Florida Realtors Chief Economist Dr. John Tuccillo. “We’ve seen an upward trend in sales since January 2011, and September’s sales were a full 10 percent above September 2010. Even prices, which have been static over the past few months, are well above where they were in January 2011.

“One of the reasons for this is stabilization in the distressed property market. This is not a problem that’s going away, but there’s a degree of certainty that is helping the market.”

WASHINGTON (AP) – Aug. 9, 2011 – The Federal Reserve said Tuesday that it will likely keep interest rates at record lows for the next two years after acknowledging that the U.S. economy is weaker than it had thought and faces increasing risks.

The Fed announced that it expects to keep its key interest rate near zero through mid-2013. It has been at that record low since December 2008. The Fed had previously only said that it would keep it low for “an extended period.”

Fed policymakers used significantly more downbeat language to describe current economic conditions. It said so far this year the economy has grown “considerably slower” than the Fed had expected. They also said that temporary factors, such as high energy prices and the Japan crisis, only accounted for “some of the recent weakness” in economic activity.

The more explicit timeframe is aimed at calming nervous investors. It offered them a clearer picture of how long they will be able to obtain ultra-cheap credit, and it was at least a year longer than many economists had expected.

But it didn’t seem to help on Tuesday. Stocks initially fell after the statement was released, possibly reflecting disappointment that the Fed did not announce another round of bond buying.

Fed officials met against a backdrop of speculation that they would say or do something new to address a darkening economic picture. The stock market has plunged and government data have signaled a weaker economy in the four weeks since Chairman Ben Bernanke told Congress that the Fed was ready to act if conditions worsened.

The economy grew at an annual rate of just 0.8 percent in the first six months of the year. Consumers have cut spending for the first time in 20 months. Wages are barely rising. Manufacturing is growing only slightly. And service companies are expanding at the slowest pace in 17 months.

Employers hired more in July than during the previous two months. But the number of jobs added was far fewer than needed to significantly dent the unemployment rate, now at 9.1 percent. The rate has exceeded 9 percent in all but two months since the recession officially ended in June 2009.

Fear that another recession is unavoidable, along with worries that Europe may be unable to contain its debt crisis, has rattled stock markets. The Dow Jones industrial average has lost nearly 15 percent of its value since July 21. On Monday, it fell 634 points – its worst day since 2008 and sixth-worst drop in history.

The tailspin on Wall Street was further fueled by Standard & Poor’s decision to downgrade long-term U.S. debt.

Bernanke didn’t speak publicly after Tuesday’s Fed meeting. The chairman this year made a historic change by scheduling news conferences after four of the Fed’s eight policy meetings each year, but Tuesday’s wasn’t one of them.

Later this month at the Fed’s annual retreat in Jackson Hole, Wyoming, Bernanke will likely address the weakening economy, the S&P downgrade and the market turmoil.

Earlier this summer, the Fed ended a $600 billion Treasury bond-buying program. The bond purchases were intended to keep rates low to encourage spending and borrowing and lift stock prices.
Copyright 2011 The Associated Press, Martin Crutsinger, AP Economics Writer.

Mortgage rates could shoot higher if lawmakers fail to reach an agreement to raise the debt ceiling by Tuesday, says Greg McBride, senior financial analyst for Bankrate.com.

But even if default is averted, there’s little downside to locking in a rate.

A government default would cause Treasury bond prices to plummet, and yields would rise. “Uncle Sam’s borrowing rate is the baseline from which all consumer and business borrowing rates are determined,” McBride says. “If Uncle Sam’s costs go up, borrowing costs go up for everybody.”

And even if the default is short-lived, the ratings agencies have signaled they’ll downgrade U.S. debt. That would also drive up consumer rates, because the government would be forced to pay higher rates to bond investors.

“Consumers might look back on this period six months from now and regret it if they don’t take action,” says Mona Marimow, senior vice president for LendingTree, a loan comparison website.

Mortgage rates are at historic lows and unlikely to go much lower. The average rate for a 30-year fixed-rate mortgage for the week ended July 28 was 4.55 percent, only slightly higher than a week earlier, according to Freddie Mac. Rates slipped on Friday after the Commerce Department reported that the economy grew at a lower-than-expected 1.3 percent in the second quarter.

Borrowers who want to lock in low rates need to act fast, says Keith Gumbinger, vice president of HSH, a publisher of mortgage data. “If the government does default, it’s going to be hard to lock in an interest rate,” he says.

How the debt-ceiling crisis could affect other consumer rates:

• Credit cards. Interest rates would likely rise, although not right away, McBride says. Credit card issuers are required to give you 45 days notice before they raise your interest rate.

Most credit card interest rates are tied to the prime rate, which wouldn’t be affected by an increase in Treasury rates, he says. However, card issuers would likely increase the margin they add to the prime to calculate the rate they charge consumers, he says.

You can protect yourself from a rate hike by paying off your balance – which makes sense even if the government doesn’t default, McBride says. “I don’t think there’s ever a good reason to keep a high credit card balance,” he says.

• Certificates of deposit. Savers who hope that higher Treasury rates will boost low CD rates will be disappointed, McBride says. Those rates won’t improve until banks increase lending, and that’s not going to happen if there’s a downgrade or default, he says. And if a default causes safety-seeking investors to flood banks with cash, McBride adds, rates could fall even more.

© Copyright 2011 USA TODAY, a division of Gannett Co. Inc., Sandra Block.

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

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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.

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.

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.