It is possible that a bank could pay you to short sell your home and pay you as the homeowner up to $30,000. What do we have to do to qualify about cash help through a short bank incentive, let me share with you the downside to these incentives. They are taxable, says my accountant. A short bank incentive is cash at closing, which is a taxable event.Incentives are taxed as ordinary income. This means unless you have losses to offset the income, you will probably pay tax on a short bank incentive. Always check with your tax adviser before accepting a short bank incentive. The fact that a short bank will hand a seller a check at closing is a suprise to many people. It doesn't make sense. Here, a seller owns an underwater home with a mortgage far exceeding the value of the home.To learn that a short bank would give cash help to a struggling homeowner is a real suprise for many people to believe. That's because their common sense tells them a cash incentive must carry strings or somehow be against the law. But there are no strings, and it's not against the law.The National Mortgage is one of the reasons why a short bank will give cash help to an underwater seller. There are also bonafide government programs that sanction cash help to a seller. One of those federal programs is the HAFA short sale program. This program pays $3,000 to sellers who complete a HAFA short sale.To get started, first determine whether your short bank participates in HAFA. If you have hired a short, your agent can look this up for you. Many companies who buy underwater mortgages from the major banks do not participate in HAFA. However, it does not mean that a seller cannot receive cash help from these short banks. It just means that a seller will not be able to do a HAFA short sale, but the bank can still pay an incentive, if it so chooses.Bank of America Cooperative. For a limited time, Bank of America is a short bank with a preapproved short sale program for certain borrowers. Many of the Sellers with original Countrywide Loans seem to qualify.The cash payments offered by this short bank vary between $2,500 and $30,000. To find out if you qualify for cash help from this short bank, give your short sale agent permission to communicate with Bank of America by completing a third-party authorization. Then, your agent can open a file in Equator to start the ball rolling.You can also find out if your short bank will provide cash help to you by calling your service provider. Ask for the loss mitigation or short sale department. Make sure you have your loan number handy and you know the last four-digits of the primary borrower's Social Security number. Ask your bank if your loan qualifies for a relocation incentive or cash incentive.Some banks call the cash help a "relocation incentive," even though you might have already moved out of the property. You do not necessarily need to be living in the property to receive a relocation incentive.Some people might feel uncomfortable asking a short bank to pay a cash incentive. However, if you do not ask for it you might not get it. There is nothing wrong with asking your short bank if you qualify to get cash help to do a short sale. Everybody can probably use a fresh start, and a cash payment at closing can help pay for a security deposit, first and last month's rent, plus pay for movers.
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