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Bank of America customers take payouts for short sales

By offering short sale incentives, Bank of America saves on costs and speeds up the process of getting bad loans off its books.  

Getty Images (2010)

By offering short sale incentives, Bank of America saves on costs and speeds up the process of getting bad loans off its books. 

About 470 Florida homeowners have avoided foreclosure and taken cash payouts from Bank of America after agreeing to short sales of their homes.

The bank began dangling cash payouts of $5,000 to $20,000 last fall to financially stressed homeowners. So far, 471 homeowners have collected an average payout of $12,000, said bank spokesman Rick Simon.

Another 3,700 homeowners have received offers from sellers and will receive payouts once the deals are finalized. Nearly 11,000 homeowners expressed interest in the program.

Jan Adams, a real estate agent with Remax All Star in Madeira Beach, represented homeowners who collected $14,625 last week when a Madeira Beach condo-hotel sold.

The California-based homeowners received $12,148 for the short sale and $2,500 for relocation assistance after a buyer paid $158,000 for the unit. The bank forgave more than $130,000 the sellers owed on the mortgage.

The process took about two months after the buyer made an offer in January, Adams said, adding: "It was the best transaction I had with Bank of America."

Last fall, the lender had targeted 24,600 of the 1.1 million mortgages it services in Florida for the short sales. The bank tested the program in Florida because of the state's high foreclosure rates, and the plan could expand nationwide if successful.

In the program, qualified homeowners would get 5 percent of the unpaid mortgage balance as of August 2011, with a minimum payout of $5,000 and a maximum of $20,000. The sales price does not affect the payout.

By offering the incentive, Bank of America saves attorney fees, court costs and property taxes by avoiding foreclosure. It also speeds the process of getting bad loans off its books and gets the properties back on the market faster.

To further sweeten the deal, the lender said it would consider waiving the deficiency on the mortgages, which would allow homeowners to sell the house for less than they owe for it without having to make up the difference to the bank.

Mark Puente can be reached at [email protected] or (727) 893-8459. Follow him on Twitter at

Bank of America customers take payouts for short sales 03/22/12 [Last modified: Thursday, March 22, 2012 8:07pm]
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