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Banks Willing to Pay Their Way Out of Foreclosures

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In a startling turn of events in the housing foreclosures saga, banks have begun offering cash rewards to struggling homeowners to encourage them to sell their homes or rental properties before a foreclosure is called for. Homeowners, many of whom are ‘underwater’ because the current property valuation of their homes is much lower than their mortgage amount, don’t know what to make of this.

Banks have begun offering homeowners as much as $35,000 as an incentive for them to agree to a short sale on their property. This scheme is being offered because more and more homeowners are disputing foreclosures and taking the matter to court. With mounting legal fees, coupled with the stoppage of mortgage payments during the court battle and the risk of neglect in the upkeep of the house, foreclosure property is becoming increasingly expensive for banks to handle. After a lengthy foreclosure battle, restoring the property to saleable condition alone is costing them big bucks.

Banks are hoping that the incentive payments will cut out resistance from homeowners and offer up the best solution for all. It is a win-win for the banks, particularly because they skip out on a potentially long legal battle on the one hand, and take advantage of making a better deal through a short sale on the other.

To read more on why banks have opted for this solution, click here. It’s pretty interesting stuff so I would encourage you to give it a quick read. Enjoy!

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