You are probably wondering "When will I get my Incentive"? Incentives are typically paid at the closing of the short sale. However, to receive your incentive you must qualify before the conclusion of the short sale. Short Sale Incentives could be considered taxable income; however it is always a good idea to consult with an accountant or the suitable professional concerning all tax matters in a short sale. In addition, Borrowers are usually not taxed for any deficiency amount forgiven due to the Mortgage Forgiveness Debt Relief Act.
The Home Affordable Foreclosure Alternative (HAFA) Program took effect on April 5, 2010 in hopes to entice lenders to opt for a short sale rather than settle for a foreclosure. HAFA short sale incentives benefit all three parties involved in the short sale process; the Investor, the Borrower and the Servicer.
•Borrowers receive $3,000 in cash at closing to go towards relocation expenses. Furthermore, the borrower is entirely forgiven of the debt, including the deficiency that lingers after the sale.
•Loan Servicers receive $1,500 after the successful conclusion of a short sale.
•Investors receive a maximum of $2,000 for signing off on overheads to second position lien holders. Also, investors receive $1 for every $3 spent to release junior liens; up to 6% with a maximum of $6,000.
*In order to qualify for HAFA, borrowers must already meet the central eligibility criteria for the HAMP modification program.
•The Property must be the Homeowner's primary residence.
•The loan must be the first mortgage on the premises.
•The homeowner must be delinquent in payments or can anticipate nonpayment in the near future.
•The unsettled balance cannot exceed $729,750.00.
* May be surpassed in some cases for two to four unit dwellings.
•The borrower's monthly mortgage payment must be more than 31% of the homeowner's gross income.
Wells Fargo/Wachovia Cash Back Short Sale Incentives- Wachovia's Fast Track Program in 2008 was the first lender incentive program, offering up to $5,000.00 back! Wells Fargo, after the merger offered $3,000.00 - $5,000.00. Wells Fargo has one of the fastest Short Sale approval ratings.
Chase Short Sale Incentives may offer to give borrowers up to $10,000.00 - $30,000.00 considering all terms and conditions have been met. Chase is currently presenting this deal to qualified homeowners through mailing out incentive letters in order to encourage a short sale.
Call The Mary Neilson Team for all your Fort Myers, Cape Coral, Fort Myers Beach, Estero and Bonita Beach real estate needs. Foreclosure and short sale experienced.
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