Following the move of Chase Bank, the Treasury Department’s HAFA program and the FHA, CitiMortgage is now offering select borrowers an average of $12,000 for completing a short sale this year. That’s great news for homeowners with a Citi first mortgage that may be facing a financial hardship. The goal is encourage homeowners that are having difficulty paying their mortgage to proactively short sale their home. If the homeowner is in the select group for this program, at the conclusion of a successful short sale, Citi authorizes the closing attorney to pay the borrower.
“Incentives will be offered to customers experiencing financial hardship who need funds to proceed with the short sale,” a Citi spokesman said. “The amount, which is agreed upon up front, varies according to the borrower’s individual circumstances and loan characteristics. It is disbursed to the homeowner when the sale is completed.”
Citi’s program is one in a long-line of programs that are rewarding borrowers with complying with a short sale. The original was started by the FHA 20 years ago and is still in effect today. That program, the Preforeclosure Sale Program, allows borrowers to receive up to $1000 at closing for completing the short sale. The Treasury’s HAFA program offers a $3,000 payout to borrowers completing a short sale. Bank of America’s Cooperative Short Sale program entitles homeowners to a $2,500 payout at closing. Chase Bank was the first to offer a 5-digit payout to struggling borrowers and now Citi is following. I anticipate that this will become the standard as short sales are a means for the lender to save money over foreclosure.