Bank of America (BAC) is taking its small Florida pilot short-sale incentive program national.
Under the program, which was tested in the Sunshine State last year, B of A will offer to pay delinquent mortgage customers up to $30,000 to help with relocation expenses after completing a qualified short sale.
To motivate borrowers even further, the short sale must be initiated by the end of this year and close by Sept. 26, 2013, senior vice president Matthew Vernon said at the National Association of Realtors' Midyear Meetings in Washington, where the program was announced. "We put a timeline in to incentivize borrowers who are no longer eligible for a loan modification."
"Bank of America is committed to providing alternatives to foreclosure whenever possible," Bob Hora, who heads B of A's home transition services unit, said in a statement released in California. "This program can help customers make a planned transition from ownership when home retention options have been exhausted or they have made a decision not to keep the home."
Initially, the program will be offered on mortgages that are owned and serviced by the bank. The amount of assistance will range from $5,000 to $30,000, and will be determined on a case-by-case basis using a calculation that includes the value of the home, amount owed and other considerations.
The short sale relocation assistance program builds on the bank's already robust short sale initiatives, which led to 100,000 completed short deals last year and 30,000 more in the first quarter of 2012. Its expansion was announced at the NAR conference because "Realtors in short sales are our sales force," said Vernon, who ran the company's loan mitigation unit before taking over its mortgage origination division.
He appeared on a panel with Pat Sheehy of JPMorgan Chase (JPM) and Joe Rogers of Wells Fargo (WFC), who also spoke about their short sale programs, which are near and dear to real estate agents because so many sellers these days are under water on their loans. Vernon's announcement drew a round of applause, but Sheehy's claim that Chase responds to short sale requests within 17 days on average was greeted with skepticism. "No way," shouted one obviously doubtful Realtor.