Big Four Set to Participate in HARP 2.0

The industry’s four largest mortgage servicers all say they will be taking part in the revamped Home Affordable Refinance Program (HARP).

Bank of America, Chase, Citigroup, and Wells Fargo have each expressed their support of the program and the changes that will allow more underwater homeowners to refinance at today’s lower interest rates.
Government officials expect the program’s revisions – particularly the GSEs’ waiver on representations and warranties – to increase competition for mortgage refinancing.

An executive with JPMorgan Chase told the company’s investors this week that HARP 2.0 will facilitate “cross-servicing refinancing” because with the rep and warranty waiver, the new lender is not required to assume responsibility for underwriting deficiencies that may have occurred with the original loan.

Chase explains that HARP may be used to replace an adjustable-rate or interest-only loan with a standard fixed interest rate loan, and typically reduces the borrower’s monthly payment.

Frank Bisignano, CEO of mortgage banking at Chase, estimates that with the new HARP guidelines, thousands of Chase customers could lower their mortgage payments by an average of $2,500 a year.

Citi said in an emailed statement that it “supports the program and expects to participate.”
Wells Fargo, likewise, said in a statement that it “welcomes the addition of the new HARP features.”
Veronica Clemons, a spokesperson for Wells Fargo Home Mortgage, says the company is waiting for specific guidelines and requirements from Fannie Mae and Freddie Mac in order to put the changes into practice.

She adds that once the company’s mortgage servicing team has the guidelines in hand, “it will take us some time – depending on the complexity of the guidelines – to make the necessary systems changes to begin offering the new enhancements to our customers.”

The GSEs’ regulator, the Federal Housing Finance Agency (FHFA), says Fannie and Freddie plan to issue guidance with operational details about the HARP changes by November 15th.

“Since industry participation in HARP is not mandatory, implementation schedules will vary as individual lenders, mortgage insurers, and other market participants modify their processes,” FHFA said.

Bank of America says it will participate in the enhanced Home Affordable Refinance Program announced by the administration, and it expects the new guidelines and eligibility criteria to go into effect after December 1st.
“Despite ongoing economic challenges, nearly 90 percent of our customers remain current on their mortgage,” BofA spokesperson Rick Simon said. “HARP helps these homeowners who remain current on their mortgage with options to lower their monthly payment when, otherwise, conventional funding options are limited.”

The GSEs have removed the 125 percent loan-to-value (LTV) cap under the program. Now any borrower with an LTV ratio above 80 percent is eligible for a HARP refinance, as long as the loan was sold to Fannie or Freddie prior to May 31, 2009, and the borrower is not delinquent on their payments.

Since HARP was launched in 2009, nearly 900,000 loans have been refinanced through the program. Government officials estimate that an additional 1 million homeowners will receive assistance under the new guidelines.
In its announcement of the program changes, FHFA encouraged borrowers to “contact their existing lender or any other mortgage lender offering HARP refinances.”

Article from DSnews.com.


Goodbye, paper. Hello, 'e-closings'

When Charles Schaffner of West Haven, Utah, closed on a home recently, he didn’t leave with a giant stack of paperwork. Instead, he left with a CD containing electronic versions of all closing documents.

The closing took less than 20 minutes, and yet Schaffner knew exactly what he was signing; he’d reviewed all of the documents at home the night before.

Schaffner got his loan through Mountain America Credit Union, which is one of the first banks in the country to roll out an electronic-closing option. Encompassing home contracts, closings and loans, electronic processes are saving time and money. (Bing: Paperless real-estate transactions)

Schaffner says his experience with electronic closing was a far cry from previous closings.

“In the five closings that I’ve been involved in in the past, people are just telling you the short version of what (the documents) are, you sign off, and you go on to the next one and you don’t have any knowledge or recollection of what it was about,” Schaffner says.

This time, Schaffner didn’t sign a single piece of paper. He signed his name once on a signature pad, then applied that signature electronically in every place it was needed. No hand cramping or shoddy, hurried signatures.

“This was a very pleasant change,” he says. “It was interesting using new technology.”

MACU’s e-closing product is called QuickClose, and it uses eClosingRoom technology from PropertyInfo, a division of Stewart Title Co. Stewart’s business-development director, Nancy Pratt, says e-closing is being embraced by consumers, who are already comfortable with signing a signature pad when they make purchases at stores.

She also says older buyers aren’t intimidated by the technology. In fact, they appreciate being able to sign once and be done.

“So many people say they are uncomfortable with the way their signature looks after signing it 80 times,” she says.

‘Listed’: People want to buy but can’t save down payments
Benefits of e-closings
Of course, a good-looking signature isn’t the only perk of an e-closing. The process saves time, money — and reams of paper. According to data from Stewart, 460 pieces of paper are used in the typical pen-and-ink closing.

Lenders save money because they save time. In the paper world, an escrow company employee is responsible for shipping loan documents in a specific order to the lender and investor. The documents usually number between 70 and 100. The “shipper” may be busy, and the loan may sit for days before documents are sent. With e-closing, the file is shipped within minutes of closing.

The lender may eventually pass savings on to you. “Eventually you’ll see those lenders that do business this way have a little better pricing,” Pratt says.

Then there’s security.

Paul Anselmo, CEO of SigniaDocs, another provider of technology that allows for a paperless mortgage process, says the method ensures compliance with new mortgage regulations. An electronic, tamper-proof seal means there is never a question of who signed what when.

“The electronic version can track what was disclosed, use a date and time stamp and authenticate the IP address used,” he says. “It would eliminate the finger-pointing you have going on now. The paper files are such a mess.”

Pratt says it’s also easy to misplace a piece of paper, which could delay any step of the process. “Many times, a title company has to go back to a borrower and ask (the borrower) to re-execute a document after the fact,” she says. “That goes away in the electronic world.”

Slow to adopt?

This technology isn’t exactly new. The foundation for e-closings was created in 2000 by the Electronic Signatures in Global and National Commerce Act, or ESIGN. Most states have also adopted the Uniform Electronic Transactions Act. Those two acts ensure that contracts signed electronically are legally binding.

But few lenders have adopted e-closing, primarily because it’s such a large undertaking. Banks would have to create their own platform or use a vendor that already has one, like the one Stewart created. It also would require a change in the way they do business.

“With the big banks, it would be a giant step for them in changing technology with hundreds of branches across the country,” Pratt says.

For now, smaller community banks and credit unions are the most likely adopters. Some larger banks have adopted pieces of the process but haven’t moved to a completely electronic closing. Although not all loans can be delivered electronically, those that aren’t may simply need a traditional “wet signature” for the note itself.

Other paperless options

While wide adoption of e-closings may be a ways off, many parts of the homebuying process are already paperless.

Since 2007, Austin, Texas-based real-estate agent Garreth Wilcock has used DocuSign to sign contracts, amendments, offers and other disclosures electronically.

Each party of the transaction — purchaser, seller, broker, etc. — reads through a document on a computer, iPad or similar device, then applies a signature electronically in each required place. Because it’s all electronic, you can’t miss a page or skip over a spot where you need to sign; the document will prompt you every time you need to sign or initial.

Money: How to purge your financial clutter

“Basically, there’s far less do-over,” Wilcock says. “And there’s no driving to people’s houses to get a scribble.”

Santa Clarita, Calif., real-estate agent Brian Melville says he saves eight to 20 hours per transaction because of electronic contracts.

“My clients appreciate it even more so than me,” he says. “They’re able to have something in their inbox when they get home instead of having to load the kids in the car and come to my office to sign something. And you don’t have to keep giving the buyer and seller — who are probably already stressed out — huge piles of paperwork all the time.”

Wilcox says he saves a minimum of 34 sheets of paper per party in most purchase transactions.

“And no transaction is ever simple — negotiating, back and forth,” he says. “Now, I print nothing. I just get things signed electronically and carry them around on my iPad for reference.”

Melville says some agents do end up printing some of the documentation — to file with a local department of real estate, for example. He also says some banks aren’t yet on board. If he’s dealing with a short sale or a bank-owned property, he says, a lender or bank may still require a traditional signature.

But he says that e-documents are definitely catching on and that many real-estate agents now offer them. When all is said and done, a buyer or seller can get a digital version of the paperwork to store on a computer. And with many counties now recording sales electronically, a buyer could complete the entire process without signing a single piece of paper.

“Everything is so connected,” Pratt says. “Every entity is so dependent on the other entities to do their business in a timely manner to make it all work. In this environment, you cut out a lot of that guesswork.”

Article is from MSN Real Estate.


Administration Announces Refinance Program for Underwater Borrowers

It’s official. The Federal Housing Finance Agency (FHFA) unveiled a new, revamped government mortgage refinancing program Monday.

The initiative involves a series of rule changes to the Home Affordable Refinance Program (HARP) to allow more underwater homeowners to reduce their mortgage debt by taking advantage of today’s rock-bottom interest rates.
Mortgages backed by Fannie Mae and Freddie Mac, and originally sold to the GSEs on or before May 31, 2009 are eligible for the program.

Under the revised HARP guidelines, the 125 percent loan-to-value (LTV) ceiling has been eliminated. Previously, only borrowers who owed up to 25 percent more than their home was worth could participate in HARP. That limitation has now been removed. The program will continue to be available to borrowers with LTV ratios above 80 percent.

The new program enhancements address several other key aspects of HARP that industry participants say have restricted its impact, including eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers, as well as allowing mortgage insurers to automatically transfer coverage from the original loan to the new loan.

In addition, Fannie Mae and Freddie Mac have done away with the requirement for a new property appraisal where there is a reliable AVM (automated valuation model) estimate already provided by the GSEs, and they’ve agreed to waive certain representations and warranties on loans refinanced through the program.

Not only are loans eligible for HARP considered “seasoned loans,” but a refinance helps borrowers strengthen their household finances, reducing the risk they pose to the GSEs. Thus, FHFA feels reps and warranties are not necessary for some of these loans.

With Monday’s announcement, the end date for HARP has been extended from June 30, 2012 to December 31, 2013.
The GSEs will release program instructions to lenders by the middle of next month, and FHFA expects some lenders will be ready to accept applications by December 1.

Since HARP was rolled out in early 2009, approximately 1 million homeowners have refinanced their mortgage loans through the program. FHFA estimates that with the revised guidelines, another 1 million will be able to take advantage of the program.

To qualify, borrowers must be current on their mortgage payments, but government officials believe by opening HARP up to more homeowners with higher thresholds of negative equity, it will help to prevent foreclosures by erasing the primary motivation behind strategic defaults.

Economists at the University of Chicago Booth School of Business estimate that roughly 35 percent of mortgage defaults are strategic. Numerous industry studies have found that homeowners who owe significantly more than their home is worth are more likely to throw in the towel and walk away from their mortgage debt even if they have the ability to continue making their payments.

“We anticipate that the package of improvements being made to HARP will reduce the Enterprises credit risk, bring greater stability to mortgage markets, and reduce foreclosure risks,” FHFA stated in its announcement Monday.
Fannie Mae and Freddie Mac also released statements in response to the announcement.

Michael J. Williams, Fannie Mae’s president and CEO, called the program a “welcome development.”
“By removing some of the impediments to refinance, lenders can more easily participate in the program allowing more eligible homeowners to take advantage of the low interest rates,” Williams stated.

Charles E. Haldeman, Jr., CEO of Freddie Mac said, “These changes mark another step on the road to recovery for the nation’s housing market.”

Article is from DSnews.com.


'Earth-Scraper' Will Get Down in Mexico City — 65 Stories Deep

A new building is proposed for the heart of Mexico City: a 65-story edifice, packed with retail, offices, apartments and a museum. But unlike its skyscraping peers, this giant structure won’t reach for the stars: It’ll plunge toward earth’s core.

Architects have designed an “earth-scraper,” a giant building that will burrow 300 meters (about 328 yards) beneath the city’s main square, according to the U.K.’s Daily Mail. Shaped like an inverted pyramid, the design, by BNKR Arquitectura (pronounced “bunker,” if we had to guess), is a creative response to the unique building challenges of densely populated Mexico City.

Lest you think it might be kinda depressing to live and work 65 stories down, a glass “roof” in the city’s main square would cover the building and allow natural light to filter down through all levels of the structure. Up above, the glass-covered plaza would continue its function as a central gathering place for the town — albeit probably not for residents queasy about heights.

According to the proposal, the first 10 floors down would house a history museum featuring Aztec and Mayan artifacts, the next 20 would hold retail shops and housing, and the last 35 would serve as commercial space, the Daily Mail reports.

The design, say its Mexico City-based creators, is an attempt to add desperately needed retail, office and living space and at the same time comply with local laws that prohibit the demolition of historic buildings and impose an eight-story height limit on new structures.

No word yet on whether the Earthscraper–a finalist in the 2010 eVolo skyscraper competition–will see the (filtered) light of day.

Article is from AOL Real Estate.


Finally, Time to Buy a House

U.S. house prices have plunged by nearly one-third in five years, and the nation’shomeownership rate is falling at the fastest pace since the Great Depression.

Two key measures now suggest it’s an excellent time to buy a house as a long-term residence or an income property — but not for a quick flip.

First, the nation’s ratio of house prices to yearly rents is nearly restored to its pre-bubble average, suggesting the financial advantages of homeownership once again await buyers.

Second, when ultra-low mortgage rates are taken into consideration, houses are the most affordable they’ve been in four decades of data.

Two of the silliest mantras prevalent during the real-estate bubble were that a house is the best investment you’ll ever make and that a renter “throws money down the drain.” Whether buying is a better financial deal than rentingisn’t a stagnant fact but a changing condition that depends on the relationship between prices and rents and the cost of financing, among other factors.

But the math is shifting in favor of buyers. Stock-oriented folks can think of a house’s price-to-rent ratio as akin to a stock’s price-to-earnings ratio, in that it compares the cost of an asset with the money it’s capable of generating. For investors, a lower ratio suggests more income for the price. For prospective homeowners, a lower ratio makes owning more attractive than renting, all else held equal.

Nationwide, the ratio of median home prices to rents on average-size apartments is 11.3, down from 18.5 at the height of the housing bubble, according to Moody’s Analytics. The average price-to-rent ratio between 1989 and 2003 was about 10, according to Moody’s. So valuations appear almost back to normal, on average.

Other factors increase affordability

But for most house buyers, mortgage rates are a key determinant of their total costs. Rates are so low right now that houses in many markets look like bargains, even if price-to-rent ratios aren’t hitting new lows. The 30-year mortgage rate rose to 4.12% last week from a record low of 3.94% the previous week, Freddie Mac said Thursday. (The rates assume 0.8% in prepaid interest, or “points.”) The latest rate is still less than half the average since 1971.

As a result, house payments are more affordable than they’ve been in at least four decades of data. The National Association of Realtors Housing Affordability Index hit 183.7 in August, near a record high in data going back to 1970. A reading of 100 would mean that a median-income family with a 20% down payment can afford a mortgage on a median-price home. The index’s historic average reading is 120. So today’s buyers can afford handsome houses — but prudent ones might opt instead for moderate houses with skimpy payments.

For example, a median house in Phoenix costs $121,700, according to Zillow.com. With a 20% down payment and a 4.12% mortgage rate, a buyer’s monthly payment would be about $470. Rent for a comparable house would be more than $1,100 a month, according to data provided by Zillow. That suggests buyers are much better off, even after adjusting for their additional expenses.

Of course, all of this assumes mortgages are available — no given now that lending standards have tightened. But long-term data on down payments and credit scores suggest conditions are more normal than many buyers think, according to Stan Humphries, chief economist at Zillow. “If you have good credit, a job and a down payment, you can get a mortgage,” says Humphries. “There’s more paperwork and scrutiny than five years ago, but things are pretty much like they were in the ’80s and ’90s.”

Not all housing markets are cheap, of course. Humphries says Zillow has developed a new price-to-rent ratio that uses price and rent estimates for each individual property rather than city medians, to better reflect the choices facing typical buyers. A fresh look at the numbers suggests Detroit and Miami are plenty cheap for buyers, with price-to-rent ratios of 5.6 and 7.7, respectively. New York and San Francisco might favor renters, with ratios of 17.6 and 17.2, respectively. The median ratio for 169 markets is 10.7.

Compare the yields
For investors seeking income, one back-of-the-envelope​ way of seeing how these numbers stack up against yields for other assets is to divide 1 by the price-to-rent ratio, resulting in a rent yield. The median market’s rent yield is 9.3% and Detroit’s is 17.9%. From those yields, a real estate-investor would have to subtract for taxes, insurance, upkeep and other expenses, and costs vary widely by market and case. But suppose total expenses are 4% of the purchase price. With the 10-year Treasury yield sitting at 2.2% and the S&P 500 index carrying a dividend yield of 2.1%, rents for residential housing in many markets look attractive, even after expenses.

It’s little wonder that, as The Wall Street Journal reported in August, even investment funds are dabbling in single-family houses (see “Big money gets into the landlord game”).
A few caveats: First, not all transactions are average ones. Even in attractively priced markets, buyers should shop carefully. Second, prices may well fall further. Celia Chen, a senior director at Moody’s Analytics, expects that prices will fall another 3% before bottoming early next year and rising slowly thereafter. “If the economy slips back into recession, however, we could easily see a 10% drop,” says Chen.

Third, property “flipping” can be dangerous even when prices are rising. That’s because absent a real-estate boom, house price gains simply aren’t that exciting. Research by Yale economist Robert Shiller suggests houses more or less track the rate of inflation over long time periods.

That’s what we’d expect from something made from sticks and stones and other ordinary materials. Houses aren’t the magic wealth creators they were made out to be during the bubble. But when prices are low, loans are cheap and attractive investment yields are scarce, as now, buyers should jump.

Article is from msn.com.


Execs of TARP-Supported Bank Charged with Hiding Millions in Losses

A federal grand jury in San Francisco has indicted two former bank executives of the now-defunct United Commercial Bank for misrepresenting loan losses to federal agencies as the bank took money from taxpayers through the Troubled Asset Relief Program (TARP). Specifically, the charges include conspiracy to commit securities fraud, securities fraud, falsifying corporate books and records, and lying to auditors.

United Commercial Bank was headquartered in San Francisco, with branch offices throughout the United States as well as in China and Taiwan. Its holding company, UCBH Holdings, Inc., was publicly traded on NASDAQ.

The defendants charged are Ebrahim Shabudin, who served as United Commercial Bank’s chief credit officer and chief operating officer from September 2008 through April 2009, and Thomas Yu, the bank’s manager of credit risk and portfolio management from June 2008 through June 2009.

The indictment, which was unsealed Tuesday, charges that between 2004 and 2007, the bank’s loan portfolio increased from approximately $4.4 billion to more than $8 billion.

By September 2008, the bank’s loan portfolio faced growing losses. In November 2008, the bank received approximately $298 million from TARP.

The indictment alleges that beginning in September 2008, Shabudin and Yu, along with others, used fraudulent accounting maneuvers and techniques to hide the bank’s true financial condition from the U.S. Department of Treasury, investors, depositors, regulators, and the bank’s independent auditor.

“Shabudin and Yu are the first senior executives of a TARP bank charged in connection with a scheme to defraud investors, which included the Treasury, and by extension the American taxpayer, Christy L. Romero, acting Special Inspector General for the Troubled Asset Relief Program (SIGTARP) said in a statement.

Romero continued, “The bank failed and all of the $298 million in TARP funds are lost. SIGTARP will tirelessly work with its law enforcement partners to root out fraud at TARP banks.”

After the bank failed in November 2009, the FDIC became the receiver and, to date, has paid out approximately $397 million as a result of the seizure. The indictment estimates total losses to the FDIC will be approximately $2.5 billion, and further alleges that none of the TARP funds have been repaid. United Commercial Bank was the first TARP recipient bank to fail.

Shabudin was arrested Saturday. Yu surrendered in court Tuesday morning. Both defendants made their initial appearances in federal court in San Francisco Tuesday and were released on $500,000 secured bonds. The defendants’ next scheduled appearance is on October 20, 2011.

The Securities and Exchange Commission (SEC) filed separate civil charges Tuesday accusing Shabudin, Yu, and United Commercial Bank’s former CEO Thomas Wu of misleading investors about the bank’s mounting loan losses.

The SEC’s complaint alleges that the three executives deliberately concealed losses from auditors, causing the bank’s public holding company UCBH Holdings Inc. to understate 2008 operating losses by at least $65 million, or approximately 50 percent.

The SEC says Wu “was considered a rising star in the banking industry,” sitting at the helm of the first U.S. bank to acquire a bank in the People’s Republic of China, but by 2009, Wu found himself at the helm of a bank on the brink of failure.

“Today’s charges reflect an all too familiar pattern – corporate executives once seen as rising stars embrace deception to avoid losses and conceal negative news, with investors and the FDIC insurance fund left to pick up the pieces. But accountability for these executives begins today,” said Robert Khuzami, director of the SEC’s enforcement division.

Article is from DSnews.com.


Congressmen Propose Using Retirement Funds to Pay Mortgages

Two Georgia congressmen are proposing a bill they believe will help some homeowners keep up with their mortgage payments and avoid foreclosure. Sen. Johnny Isakson (R-Georgia) and Rep. Tom Graves (R-Georgia) introduced the Hardship Outlays to protect Mortgagee Equity (HOME) Act, which would amend the Internal Revenue Code of 1986 “to provide penalty free distributions from certain retirement plans for mortgage payments with respect to a principal residence and to modify the rules governing hardship distributions,” states the bill.

“Many Americans who have been responsible enough to save for retirement in the past now find themselves out of work,” Graves states. “Unfortunately, under current tax law these men and women cannot withdraw retirement funds to pay for their homes without paying a ten percent penalty to the IRS – often resulting in late payments, oreclosures, and at a minimum punishing a taxpayer who has saved responsibly in the past.”

Under the HOME Act, individuals may withdraw up to $50,000 or half of their 401(k) account – whichever is smaller – for the express purpose of making mortgage payments on their principal residence.

If the funds are used for mortgage payments within 120 days of withdrawal, the individual will not face penalties.
Deferred income tax, however, would not be waived for these withdrawals under the proposed bill.

“This legislation will simply place taxpayers who have saved responsibly on the same level as those who have not, all the while reducing foreclosures, eliminating red tape, and accomplishing a goal that all Members of Congress can support – keeping Americans in their homes,” Graves states.

“I am delighted to join Congressman Graves in introducing the HOME Act today,” Isakson stated. “This bill will help Americans who risk foreclosure use their own resources to make their mortgage payment on time without being penalized by the federal government.”

He continued: “I firmly believe that economic recovery in this country will not occur until the housing market bounces back.”

“To that end, this legislation will help strengthen the American housing market because it will lead to a reduction in foreclosures and in turn will help stabilize home values,” Isakson concluded.

Article is from DSnews.com.


Bank of America Offers Up to $20,000 to Entice Short Sales

 

 

 

 

 

 

 

 

 

Bank of America is offering up to $20,000 to select Florida homeowners willing to agree to a short sale instead of entering foreclosure.

To sweeten the deal further, the nation’s largest lender will consider waiving the deficiency on the loan, which allows homeowners to sell the house for less then they owe without having to make up the difference to the bank. It can save homeowners thousands of dollars.

Not every Bank of America customer in Florida will be eligible for the program, which pays a minimum cash incentive of $5,000. It’s targeted toward home­owners who cannot afford their mortgages.

To quality, the short sales must be submitted for bank approval by Nov. 30 and must close by Aug. 31. Sales already under contract are not eligible; neither are properties outside of Florida.

This is a “test-and-learn” program being rolled out only in Florida because of the higher foreclosure rates than other parts of the country, said Christina Beyer Toth, a Tampa-based spokeswoman.

Florida is seen as a viable market to gauge short-sale response when presenting home­owners with relocation assistance, she said. If successful, the plan could expand to other states.

The bank notified select Florida real estate agents this week about the offer.

“It will get a lot of people off the fence about wanting to sell their home,” said Steve Capen of Keller Williams Realty in St. Petersburg. “This makes sense.”

What’s in it for Bank of America? It saves attorney fees, court costs and property taxes by avoiding foreclosure. It also speeds the process of getting bad loans off its books and gets the properties back on the market faster.

Capen, who specializes in short sales, plans to heavily market the offer to clients. But he cautioned that homeowners shouldn’t get overly excited because many of these plans have restrictions.

“It will only help a fraction of the people,” he said.

Homeowners get the cash after the short-sale deal closes. A caveat: Homeowners might have to pay income taxes related to the deficiency waiver and the cash payout.

The cash payouts give home­owners a reason not to trash their homes or strip them bare before moving out. When houses enter foreclosure, home­owners can essentially live for free until banks take possession at the end of the court process, which takes an average of nearly two years in Florida.

Attorney Chris Boss of Yesner & Boss said the deficiency waiver will enable homeowners to buy a house without filing bankruptcy or waiting three years from when foreclosures become final.

“It’s a chance to get away from the house with some money in your pocket,” Boss said. “This is good for the economy.”

Other national lenders started similar programs.

Late last year, JPMorgan Chase began giving homeowners $10,000 to $20,000 and waived losses on the mortgage. The bank still suffers a loss in the process, but generally speaking, sale prices on short-sale homes are higher than foreclosed homes.

Real estate experts and economists have said the housing market cannot fully recover until the millions of distressed mortgages are removed from the system.

Article is from St. Petersburg Times.