Chase Gives Seller $10K Back Without Even Being Asked!

Short Sale Specialist

When Chase started sending incentive solicitation letters to their borrowers in hardship early this year, many in the real estate industry were excited about the potential positive impact it could have. Sending letters to home owners offering $5,000 to as much as $35,000 BACK as a short sale incentive was a revolutionary way to get the borrower to take action and participate in a short sale. While this has certainly made a difference with some borrowers who can really use the money, unfortunately it rewards those who have made poor decisions and punishes those who are still responsible in many cases.

Chase incentive

Here is just one of those cases. We just got a Chase short sale approval letter today from a local file in our Jacksonville, FL brokerage company. The purchase price was only for $60,000. The property and situation qualified for the HAFA program, and the borrower was excited about the possibility of getting $3,000 back to participate in a short sale. Short sale package was received and HUD was sent over showing a net to the lender of just over $47,000. After a short time of waiting and processing, we finally got an approval letter today. But something was different.

After reading the first page of the approval letter, it said that Chase was to receive only $37,000 back at closing. Instinctively, our initial reaction was that this must be some mistake, Until we read further. As it turns out, without the seller or their broker even asking for additional money back, Chase gave the borrower an additional $10,000 back. Including the HAFA money, this seller will be getting $13,000 cash back short sale incentive at the close of their property. Here we have a borrower, who in one way or the other defaulted on his financial responsibilities, and was rewarded with more money than many will see at any one time in their lifetime.

I guess they are just giving defaulted borrowers a little taste of the wall street style executive bonuses that we have become accustomed to hearing about within the banking industry. Where is the justice in this? How is this fair to those who work hard to continue paying a mortgage that is more than the value of their property?


For Original Article See:

Chase Bank Overdoes it With Cash Back Short Sale Incentive

 

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Permalink Reply by Jeff Payne on November 21, 2011 at 8:58am

The reason that it does not cost to take the BMW back is that they can do just that when you do not pay, take it back.

The legal fees represent a large portion of the cost of a foreclosure plus the cost of the banks employees handling the foreclosure.  There is property preservation, repairs, and holding costs.

I too think $75,000 may be high but believe that it costs at least 1/2 of that amount and it certainly costs alot more than $10,000 that Chase is offering.  I list REO properties and more than once I paid more than $10,000 just for repairs to the property out of pocket to be reimubursed.

Documentation and paperwork are good for them to have but they still have to follow the legal proceedings and you and I both know the foreclosure attorneys are soaking the banks for all that they can. 

 

Permalink Reply by Richard on November 21, 2011 at 9:47am

Jeff,

 

This is my point.  Overheads and profits in recovery are out of control.  You have companies that make big profits in doing just that alone.  I'm not going to even mention the word outsourcing.  It may as well be a 4 letter word in some circles.  Anyway, these numbers have gone up astronomically because the industry has allowed it to so.  From a glance, it seems that there is no self governance and when that happens we all know that goods and services tied to any specific industry will taken advantage of within the system.

Sure enough there are employees salaries and benefits, legal fees/proceedings and costs of repairs however, you can't just give away the farm.  As I say, accountability is the key.

You know, people really get upset when they hear about a governmental agency paying $200 for hammer..............well what makes this so different?

Permalink Reply by Jeff Payne on November 21, 2011 at 10:50am

What makes it different is that this is not the government.

Permalink Reply by Richard on November 21, 2011 at 12:06pm

True, but some of the monies and ties are in the form of mortgage backed securities are.  And then there are the losses and write offs.  Still, end result.........you and I pay more.

Permalink Reply by Ellen Levy on November 21, 2011 at 4:48am

Thanks, Jeff.

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