Bank of America Offering $20,000 For Short Sales

Bank of America has begun a test program in Florida that offers homeowners between $5,000 and $20,000 to short sell their homes instead of letting them fall into foreclosure and to leave the homes in good condition. The bank will also consider waiving the deficiency judgement (which is their right to come after the homeowners later for the difference between what the home sold for and what the homeowners owed). The program is available to homeowners who do not currently have offers on their homes, whose short sales are submitted for approval by November 30 and who closings occur before August 12, 2012. The program is not applicable for Ginnie Mae, VA and FHA loans.

This is a fantastic plan that homeowners who are underwater with their BoA mortgage and want to sell should consider. It is also a good idea for the banks because the average length of a Florida foreclosure is 676 days (the national average 318 days), according to RealtyTrac. And homeowners whose homes fall into foreclosure have no incentive to maintain the property. The lack of property maintenance while the home is in foreclosure often leads to more than $20,000 in remediation, particularly in Florida where mold is prevalent in homes that are not kept sufficiently ventilated, and previously pristine pools become swamps. It also prevents the homeowners from taking the appliance with them when they leave.

Wells Fargo and J.P. Morgan Chase have similar programs.