The bank offered Angelique Pierce $25,000 to short sell her home. The listing price: $95,000.

NEW YORK (CNNMoney) — In an effort to cut their losses, banks are paying some struggling homeowners as much as $35,000 to sell their homes before they end up in foreclosure.
The deals are aimed at incentivizing homeowners who owe more on their home than it is worth and who are seriously delinquent on their payments to sell their homes in a short sale.

In short sales, homes are sold for less than what is owed and the bank forgives the excess debt. Banks have been reluctant to approve such deals in the past — since they take a loss on the home — but in certain cases, it’s become a much better proposition than letting the homeowner fall into foreclosure.
This new approach by the banks has startled plenty of homeowners, according to Elizabeth Weintraub, a Sacramento-area real estate agent who specializes in short sales.
“Initially, the homeowners are skeptical,” she said. “The bank may have already turned down their request for a modification. Then, one day, they call and say, ‘Let us give you some cash.’”
When Chase Mortgage (JPM, Fortune 500) told Angelique Pierce, that she would receive a check for $25,000 if she sold her house, she couldn’t believe it.
“I got the offer in the mail,” said the Rancho Cordova, Calif. resident. “I called my bank to ask if it was real.”
After Pierce became disabled a few years ago and had to stop working work, she fell behind on payments on both her first and second mortgages, valued at $250,000 and $50,000, respectively.
Now, she’s trying to sell her three-bedroom ranch for just $95,000 — almost half of the $179,000 she paid for the place in late 2002.
Foreclosure free ride: 3 years, no payments
From the bank’s point of view, the offers make sense, according to Tom Kelly, a spokesman for Chase Mortgage, who would not comment on Pierce or other individual cases. “The first choice is a modification but if that’s impossible than a short sale is a faster, more efficient solution,” he said.
For the banks, foreclosure has become an increasingly difficult and expensive option. Homeowners have learned to fight the banks tooth and nail, dragging out cases for years.
And as the cases drag, expenses grow. Homeowners not only stop paying their mortgages but they stop paying property taxes and conducting normal maintenance as well. Roofs, siding, plumbing and other parts of the home deteriorate and the property loses value. By the time banks take possession, they’re out tens of thousands of dollars.
Foreclosures: America’s hardest hit neighborhoods
“I’ve seen a lot of foreclosures for sale where it would cost a lot more than $20,000 to get them into condition to sell again,” said John Hayton, a short sale specialist in Orlando, Fla, who has had a number of clients receive offers from the banks.
Short sales also command higher prices than foreclosed homes. In December, foreclosed properties sold for an average of 22% less than conventional sales, while the discount for short sales was only 14%, according to the National Association of Realtors.
All that has been true for years, but it is only lately that these outsized incentives, which Bloomberg recently reported on, have surfaced.

Sellers are more cooperative when they’re going to receive a five-figure check for their troubles.
Nick Chaconas, an agent with discount broker Redfin, wondered why one seller was so anxious to sell their home. “Since I represent the buyer, I didn’t even know about the incentive until the closing,” he said.
It turned out that the seller’s bank was writing her a check for $30,000.
Whether sellers can expect incentives from their banks depends on multiple factors, including where they live.
Wells Fargo (WFC, Fortune 500) limits its offers to certain states, such as Florida, where the foreclosure process can be lengthy, according to spokeswoman Veronica Clemons. The bank has paid $10,000 to $20,000 to borrowers who short sell or transfer their title to Wells via a deed-in-lieu.
What the foreclosure settlement means for you
Bank of America (BAC, Fortune 500) had a pilot program in Florida that paid incentives of $5,000 to $20,000 for sales that were initiated between Sept. 26, 2011 and Nov. 30, 2011 and close by the end of this August. The amount of the incentive is based on 5% of the unpaid balance, with a $5,000 minimum and $20,000 maximum.
Jumana Bauwens, Bank of America’s spokeswoman, called it a “test-and-run program” that may be expanded to other states.
The offers are not always a panacea for homeowners struggling to pay the bills, however.
Pierce, for example, has not been able to make hers pay off. She had a buyer but her second mortgage holder refused to go along with the deal unless it got a share of the $25,000 she was being offered by the bank. She said that the bank balked at the deal and the sale was cancelled.
She’s looking for another buyer, but it’s up in the air if Chase will honor its original offer if the second mortgage holder won’t cooperate.

Banks pay delinquent borrowers $35,000 to sell their homes
By Les Christie @CNNMoney February 15, 2012: 8:28 PM ET

Do you need help with a short sale? Call Beachy Properties at 941.371.8163 or email us at davebeachy@gmail.com.

Bank of America encourages distressed homeowners to explore a short sale as a viable
option for avoiding foreclosure. To that end, for a limited time we are offering enhanced
relocation assistance to help motivate homeowners to engage with us on a pre-offer short
sale. An additional benefit for these pre-offer programs – such as the Home Affordable
Foreclosure Alternatives (HAFA) and Bank of America’s proprietary program – is that
deficiency may be waived for the homeowner.
Eligibility:
• Homeowners with property in Florida
• Short sales initiated without an offer between September 26 and November 30
• The customer will have to be eligible for one of the without offer programs such as
the HAFA program or our proprietary program (specific investor participation and
eligibility criteria do apply to these programs)
• Successful closing of the eligible short sale by August 31, 2012
• Minimum relocation assistance is $5,000 and maximum is $20,000, with the specific
amount calculated based on the unpaid principal balance
Exclusions:
• Ginnie Mae, FHA, VA and USDA loans are ineligible for participation
• Lot loans are ineligible for participation
• Properties outside the state of Florida are ineligible for participation
• Short sales initiated with an offer are not currently eligible for the enhanced
relocation assistance
Frequently Asked Questions:
Q: How can I find out if my client/homeowner qualifies for this relocation assistance?
A: Call a Bank of America short sale specialist at 1.877.459.2852.
Monday – Friday 8 a.m. – 10 p.m.; Saturday 9 a.m. – 5:30 p.m. Eastern

Q: Do I have to do anything differently when initiating or completing the short sale?
A: No. As long as the homeowner’s short sale is initiated between September 26 and
November 30, 2011, and the property closes by August 31, 2012, they will be
eligible.
Q: Will the relocation assistance funds be reported on the HUD-1?
A: Yes, they will be documented on the HUD-1, and a 1099-MISC will be issued.
Q: Can the relocation assistance funds be used to pay off existing liens?
A: Yes, if the investor approves it.
Q: Is the relocation assistance added to any other incentives, such as the HAFA or Bank
of America proprietary program incentives?
A: No. A homeowner will receive the $5,000 to $20,000 in place of the typical incentive
paid out by these programs. The relocation assistance is essentially an
enhancement to the standard payout offered on these programs.
Q: Is the enhanced relocation assistance available for other programs?
A: Currently, the enhanced relocation assistance is only available to short sale programs initiated without an offer
Questions?
. However, as we gauge the success we may extend this
incentive to other programs.

Questions? Call Beachy Properties at 941.371.8163 or email Davebeachy@gmail.com.

In “Domino Effect,” one domino strikes another and another to demonstrate the economic impact of a home sale.  Through their purchase, new home buyers provide jobs community-wide for retailers in the home improvement sector, furniture sellers, affiliated businesses such as appraisers, inspectors, etc.  It shows how one dollar spent on housing translates into thousands od dollars distributed throughout Florida’s communities.

The FHA Waiver of the Anti-Flipping rule has been extended through December 31st of 2011.  Frederick, Maryland Realtor® Karen Highland discusses the effectiveness of the waiver, which went into effect January of 2010 and has helped to sell some of the inventory of foreclosed homes.

“In an attempt to crack down of house flipping, FHA created rules, enacted in 2005, that prohibit FHA from insuring a mortgage on a home that has been owned by the seller for less than 90 days.  ‘Flipping’ is the predatory practice of quickly re-selling a property at inflated prices to unsuspecting borrowers.  The rules were intended to protect FHA borrowers.

FHA’s research shows that in today’s market, acquiring, renovating and re-selling a foreclosed home often takes less than 90 days.

One of the effects of the anti-flipping rule was that sellers of renovated foreclosures were less likely to take an offer from an FHA buyer because they would have to wait the 90 days, covering the carrying costs and risking vandalism and other problems arising from vacancy.  Since a good number of homes are bought with FHA financing today, this is a bottleneck to getting homes sold in neighborhoods blighted with foreclosures.

Protecting Buyers

As the waiver continues, there are still rules in place to protect buyers from predatory flipping practices:

• All transactions must be ‘arms-length’.  There must be no relations or interest between the buyer and seller, or other participating parties.
• When the sales price of the home is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender mees specific conditions.
• The waiver is limited to forward mortgages, it doesn’t apply to Home Equity Conversion Mortgage (HECM) for purchase program.

It Begs the Question…

How effective are the anti-flipping rules, anyway?  Does the imposition of 90 days really solve the problem?  I often question well-meaning fixes to problems that don’t really seem to fix the problem.  Fortunately, FHA is very quick to ‘tweak’ the rules and make them fit the current housing problems.  It will be interesting to see if the fix to the fix of the problem sticks…”

WASHINGTON – Nov. 22, 2010 – The financial services industry has launched an aggressive campaign on Capitol Hill to bolster the legality of the way companies have turned mortgages into securities and traded them across the globe in recent years.

The companies have opened wide their wallets for lobbying and are flying top executives to Washington for one-on-one meetings with lawmakers. They are holding briefings for key staffers, including an event last week that drew more than 60 aides. And they are blanketing Congress with white papers, memos and other documents that lay out their arguments.

The focal point of their efforts is Mortgage Electronic Registration Systems, or MERS, the controversial, privately run electronic database that is used by practically every lending institution and investment company to track the transfer of the ownership of mortgages as they are packaged into securities and traded at lightning speed around the globe.

But MERS does more than just track the trading of loans. In the vast majority of mortgage documents at local courts and offices across the country, it is listed as the holder of the loans. That allows the financial industry to trade mortgages as much as it wishes without spending the time and money to refile the paperwork.

The industry is seeking legislation that would effectively affirm MERS’s legality and block any bill that would call into question what MERS does. MERS has spent more than $1 million in lobbying since fall 2008, when lower courts around the country began to rule against it. But MERS had kept its name under the radar until the recent uproar over foreclosures revealed broad problems in mortgage paperwork.

If successful on Capitol Hill, the industry could in one quick swoop make all lawsuits related to MERS across the country moot and remove one of the key uncertainties dangling over the mortgage industry. On the flip side, lawmakers could create a new federal registry, effectively killing MERS’s business and forcing the industry to submit to greater oversight.

In recent years, MERS has become the target of numerous legal challenges from homeowners in foreclosure who allege that mortgage transfers made through the system are invalid because they bypass local recording laws. MERS, the lawsuits contend, does not have standing to foreclose because it is only a database and not the actual holder of the mortgage.

The liabilities could be astronomical for MERS. One lawsuit in California alone is seeking recording fees that could cost the company from $60 billion to $120 billion. But the consequences for the financial industry are even greater, as challenges to the validity of transfers done by MERS call into question the entire process of how loans were securitized and could render the 66 million mortgages in its system foreclosure-proof.

In the wake of such controversies, lobbyists for Reston-based Merscorp, which runs MERS, have been floating the idea of legislation that would establish the firm as the national registry to track the transfer of mortgages.

The MERS database “is a powerful tool that can be harnessed by the Congress and the industry to improve the mortgage finance system,” R.K. Arnold, Merscorp chief executive, told members of the Senate banking committee this week.

Tom Deutsch, deputy executive director of the American Securitization Forum, an industry group that defended the validity of MERS in a recent paper being circulated on Capitol Hill, said establishing a centralized tracking system would resolve much of the confusion resulting from the patchwork of local laws governing mortgages and their transfer.

“There’s a lot of validity in the idea of a national mortgage registry that is complete and unambiguous about legal title to loans across all 50 states,” he said in an interview.

In its paper, the forum argued that although there have been “several minority decisions” in the courts that have taken issue with MERS, “not one of these decisions has challenged MERS’ ability to act as a central system to track changes in the ownership.”

Consumer advocates say such legislation would retroactively bless all mortgage transfers made through MERS – and eliminate one of the strongest legal arguments that homeowners in foreclosure are using to challenge their cases. There’s also concern among state officials that such a bill might permanently remove some of their power over property law and place it within federal jurisdiction.

Some of the advocates are referring to the idea as the “great MERS whitewash bill.”

“Fixing MERS on a federal level to give them a free pass from complying with what we have known as the law for many years because the banks screwed up is really a bad precedent,” said Ira Rheingold, executive director of the National Association of Consumer Advocates.

The industry is also facing skepticism from Democrats such as Rep. Marcy Kaptur (Ohio), who is known for her strong opposition to the federal government’s bailout of Wall Street.

Kaptur plans to introduce legislation that would prohibit government-controlled mortgage financiers Fannie Mae and Freddie Mac from buying new mortgages that are in the MERS system. “It was invented by the most powerful financial players in the country while regulators were asleep at the wheel,” Kaptur said in an interview.

Kaptur is not opposed to a national system for tracking mortgages. She’s asking the Department of Housing and Urban Development to study how a federal land title system could operate in a way that would protect states’ rights. But she said there needs to be more transparency and regulatory oversight over such a system.

John Taylor, head of the National Community Reinvestment Coalition, said he, too, supports the idea of a national tracking system because it could force the industry to be accountable for mortgage paperwork. But he doubted whether MERS could fill this role.

“MERS was the personification of the darkest period of American finance, where Wall Street dictated to people in the real estate world the fact that they didn’t really care about underwriting standards anymore,” he said.

Lobbyists working for MERS include people who were prominent legislators or federal officials: former U.S. representative Bob Livingston and his former chief of staff, Allen Martin; John M. Duncan, assistant secretary of the Treasury for legislative affairs in the George W. Bush administration; and Arnold Havens, a former general counsel at Treasury.

MERS is also under scrutiny by the Office of the Comptroller of the Currency, which oversees national banks. The OCC is taking the lead in an interagency examination of MERS and the accuracy of the information in its database. The agency is also sending personnel to look at the foreclosure process at large mortgage servicers and how they use MERS.

Copyright © 2010 washingtonpost.com.

I have been asked by several people in the past where they can get a FREE copy of their credit report.  The website below is the best one that I have been able to find that will give you all three reports.  It is important to check your credit score periodically to see if their is wrong information.  From this website you can also dispute and wrong info that you find.  You can also get a current copy of your credit score.

The website is www.annualcreditreport.com.  AnnualCreditReport.com is a centralized service for consumers to request free annual credit reports. It was created by the three nationwide consumer credit reporting companies – Equifax, Experian and TransUnion.

If you are interested in more real estate info or to learn more about short sales call Dave Beachy at 941.371.8163 or go to beachyproperties.com

Beachy Properties offers Moving Truck to clients FREE of charge.  The moving truck is also available to any charity or church organization for FREE.  Dave Beachy, the Broker and owner of Beachy Properties says,  “I tried to think of a new idea that would help offset the cost of moving for our clients in our current economy.”  For more info call 941.371.8163 or go to BeachyProperties.com.

Dave Beachy offers free moving truck

Home Affordable Foreclosure Alternatives Program (HAFA)