patrick.net

Doesn't this "generous" incentive program indicate that the banks are anticipating home prices to drop a lot more? Spending $35,000 to hurry up the process seems so un-bank-like?

If they anticipated these assets (home prices) would be going up anytime soon it seems that they wouldn't mind dragging their feet. Even if they believed home prices were going to remain level it doesn't seem like they would be giving away $35,000 a pop. They must want to get them sold NOW before they market drops drastically.

Either that or they screwed up on the original paperwork for those particular houses and this is their way to avoid all the foreclosure hassles.

Perhaps both reasons are true.

They don't care about losses, they can write those off, they already threw your equity away, and got as many payments out of the last temporary owner as they could already. Time to move on to the next sucker, as the back end of the loan pays better anyways.

"the back end of the loan pays better anyways"?

By "the back end of the loan" do you mean the part where most of it goes toward interest so the bank gets to write off more principal? Or would that be called "the front end of the loan"?

WTF?! I never imagined this.... I want some of that action!

Can you imagine the scams that could happen.

I bet anyone, a dozen donuts, that there are BA Real estate geniuses, that have houses in the "fortress" with mortgages, RENT out the house, DEFAULT on the loan, hold out for a year, two or more (I know someone who has held out for three years), collects the rent, doesn't make the payments, and gets this sweet short sale deal.

Man, what a great scam!

They get:

a.) Buy house with no money down.
b.) Take out interest only loan (below normal payments)
c.) Collect rents
d.) Not make payments.
e.) Get $35,000 + Federal HAMP money, upto what? $3,000?
f.) Walk about debt free.

Great way to scam $100K or so. What a deal.