Lenders paying borrowers to do short sales--few people even getting cash

Lenders are allowing more short sales by financially strapped homeowners and a few people are even getting cash to complete the sale.

Short sales are when lenders allow borrowers to sell homes for less than their unpaid mortgages. They are an alternative to foreclosures.

Short sales have been increasing for months, but the financial incentives — which Realtors say are random and infrequent — are a newer wrinkle.

Examples:

•JPMorgan Chase went national with short-sale incentive offers last year, paying up to $35,000 in some cases.

•Bank of America is testing incentives from $5,000 to $25,000 in Florida to see if they should be expanded to more states. The Florida program began last fall, spokesman Richard Simon says.

•Wells Fargo's incentive offers range from less than $3,000 to $20,000, spokesman James Hines says.

Short sales, even with incentive payments to borrowers, can save lenders money compared with the expenses involved in completing foreclosures.

http://www.usatoday.com/money/economy/housing/story/2012-02-19/lenders-allow-more-short-sales/53157246/1