Bank of America has extended the signup deadline for a program that pays up to $20,000 to distressed Florida homeowners who agree to sell their houses in a short sale.
The original deadline expired Wednesday, but the bank extended the application period to Dec. 12 so more homeowners could enroll. The program pays between $5,000 and $20,000 to homeowners who agree to a short sale instead of going into foreclosure.
Bank of America notified about 20,000 homeowners that they might be eligible for the program, and about 15 percent have verbally indicated they want to participate, said spokesman Rick Simon. "The bank has been pleased with the response to the … program," Simon said.
Bank of America announced the program in early October. To sweeten the deal further, the nation's largest lender said it would consider waiving the deficiency on the loan, which allows homeowners to sell the house for less then they owe without having to make up the difference to the bank. It can save homeowners thousands of dollars.
The deals must close by Aug. 31. The bank services 1.1 million Florida mortgages.
Short sale specialist Steve Capen of Keller Williams Realty in St. Petersburg has gained 15 listings from the program. Communication mistakes with vendors handling the paperwork for the bank have caused processing delays, he said, adding: "It's been a mess."
For homeowners who want to walk away from underwater loans with cash in their pockets, "This is good that Bank of America is trying to get the word out more," Capen said.
Not every Florida customer is eligible for the program. Bank of America targeted homeowners who cannot afford their mortgages. The bank rolled out the "test-and-learn" program only in Florida because of the higher foreclosure rates here than elsewhere. If successful, the plan could expand to other states.
Mark Puente can be reached at firstname.lastname@example.org or (727) 893-8459. Follow him at Twitter at twitter.com/markpuente.