If you’re facing a foreclosure, you have many different options to avoid the pain and discomfort of this process. Banks have an incentive to help you too, because it can cost upwards of $50,000 for the bank to process a foreclosure. If your home is worth $250,000, that’s a sizable chunk of the value of the home. Fortunately, there are win-win options that are much less expensive.
When you sell a home short, you’re selling it for less than what you owe on the house. This presents a major problem. You need to make up the shortfall on the loan, but you can’t. The bank is forced to take a loss. With no money, you’re stuck for options as to how to move. The bank wants you out of there once the sale is complete.
Many NJ short sales agents can sell a home short within 6 months – that doesn’t give you a lot of time to find a new apartment.
The Incentive From Banks
Fortunately, banks are looking out for their own interests. Because they want you out of there, they are willing to put up some money for you to take care of the home. This is called a “cooperative short sale.” With this incentive, the bank pays you $1,000, up to $10,000 or more to stay in the home and take care of it until it’s sold. You pay no mortgage payments or rent.
The bank is willing to do this because they get a low-cost property manager and it’s cheaper than going through foreclosure.
Relocation assistance programs can put additional money in your pocket – up to $3,000 to help you move. This money is available through the Home Affordable Foreclosure Alternatives program (HAFA). Of course, there are also non-HAFA short sales that provide you with money for relocation.
Banks can give you more than the amount allowed under HAFA – sometimes up to $20,000 or $30,000. In some cases, you can get both the HAFA and non-HAFA relocation incentives.
This could amount to a rather significant sum of money – money you use to find a new place to live. It could even be enough to pay your rent in your new place for up to a year or more.
If you’re a tenant, and your landlord is losing the home you rent or you have tenants in a home you’re selling short, there may be incentives for the tenants to move too.
Tenants that are forced out of their rental homes or apartments generally get a security deposit cash sum plus additional “cash for keys” incentives to move out on a predetermined schedule.
What You Should Do
Before you get too excited, you should contact your lender and your real estate agent to get more details about what you qualify for. Not everyone qualifies for the same amount, and some of the incentives are quite paltry, depending on your actual expenses and needs for money. Other times, the incentives are very attractive and make you almost wish that you had taken this kind of offer sooner.
Lisa Anders has worked as a real estate consultant for some time now. When she has the time, she enjoys sharing information with others by blogging online. Look for her articles on a variety of real estate and homeowner blogs.