Bank of America Corp. (BofA) said on Tuesday it had launched a nationwide program that offers increased relocation payments to delinquent mortgage customers who complete qualifying short sales.
The second-largest U.S. bank said the program, tested in Florida last year, offers payments of between US$2,500 and US$30,000 to help homeowners move out of their homes. A short sale is when a lender allows a homeowner to sell a home for less than the amount owed on the mortgage.
BofA, which inherited loads of bad loans when it bought Countrywide Financial in 2008, has been exploring ways to work with homeowners outside of foreclosure. In March, the bank said it would offer a limited number of customers facing foreclosure the ability to lease their homes. Bank of America customers have completed 200,000 short sales in the last two years and another 30,000 in the first quarter of this year, the bank said.
To qualify for the increased assistance, borrowers must work with the bank to obtain a preapproved sales price. The short sale must be started by the end of this year and completed by Sept. 26, 2013. The assistance is determined on a case-by-case basis, depending on the value of the home, the amount owed and other factors.