In recent times, reports have arisen indicating that foreclosure proceedings are generally taking a longer time to be completed. This brings up a question: is this trend affecting how mortgage lenders react to homeowners being behind on a mortgage?
Recently, the Palm Beach Post reported that one lender has implemented an intriguing program regarding mortgages. The program reportedly involves the lender offering some homeowners who haven’t kept up with their mortgage payments money in exchange for the homeowner agreeing to a short sale of the property the mortgage is on.
Reportedly, in this program, it is the lender that chooses which homeowners will be given such an offer. The lender reportedly has not made public what criteria it uses when deciding when such an offer will be made.
Why is the lender engaging in such a program? According to the Palm Beach Post article which reported this story, the lender has not specifically indicated why it is offering homeowners who are behind on their mortgages money to agree to a short sale. However, the article did mention that the lender indicated that it is trying to cut its losses when it comes to certain mortgage/foreclosure matters. Thus, one wonders if the increasing length of foreclosure proceedings played a role in the lender’s decision to implement this program.
It will be interesting to see what happens with this program and what effects it ultimately has on homeowners. It will also be interesting to see if other lenders will implement similar programs.
Source: The Palm Beach Post, “Chase borrowers getting cash to complete short sales,” Paul Owers, 27 Jun 2011