Under current short sale regulation, distressed homeowners have a greater chance of receiving cash assistance for relocation after a short sale. Furthermore, new rules governing short sale transactions are intended to expedite the process and to make it less complicated. These new guidelines are outlined in the Treasury’s Home Affordable Foreclosure Alternatives (HAFA) program; they are designed to speed up lenders’ decisions concerning pre-foreclosure sale (short sale) applications. Under HAFA, the lender makes an up-front decision as to a minimally acceptable price for the home. Then, both the homeowner and lender are compelled to adhere to tight deadlines. Finally, the homeowner/seller receives $3,000 to help with the expense of having to relocate.
Additionally, banks have instituted programs which offer short sale incentives to mortgagors facing foreclosure. For example, Bank of America, one of the nation’s largest mortgage servicers, offers the HAFA program along with several in-house programs. Most notable of Bank of America’s proprietary programs is the “Cooperative Short Sale Program,” which features an “Enhanced Relocation Assistance” that ranges from $2,500 to $30,000. It is important to note that this relatively new program is applicable to pre-approved short sales (wherein the short sale is initiated without an offer to purchase), and that the value of the home helps determine the actual incentive amount. In addition, Chase Bank offers short sale incentives of up to $45,000, although not all Chase loans meet the criteria for the incentive.