SOME BANKS ARE OFFERING CASH INCENTIVES TO ENCOURAGE SHORT SALES

SOME BANKS ARE OFFERING CASH INCENTIVES TO ENCOURAGE SHORT SALES

Banks, accelerating efforts to move troubled mortgages off their books, are offering about $35,000 in cash to
delinquent homeowners to sell their properties for less than they owe.

Lenders have routinely blocked or delayed such transactions known as short sales in which they
accept less from a buyer than the seller's outstanding loan.

Now banks know that the deals are faster and less costly than foreclosures, which have slowed due to regulatory
probes of abusive practices. Banks are nudging potential sellers by pre-approving deals, streamlining the closing
process, foregoing their right to pursue unpaid debt and in some cases to provide large cash incentives.

Losses for lenders are about 15% lower on these short sales than on foreclosures, which can takes years to
complete, while taxes, maintenance and other costs accelerate, not to mention vandalism of homes.

The short sale deals accounted for about 33% of financially distressed transactions in November, up
from 24% last year. Karen Farley of San Marcos, California, hadn't made a mortgage payment in a
year when she got a form letter from her lender."You could sell your home, owe nothing more on
your mortgage and get $30,000," J.C. Morgan Chase said in the letter.

The New York based bank agreed to let her sell her home for $200,000 less than what she owes.

LAS VEGAS PERSPECTIVE -

Rick Piette, manager of Premier Mortgage Lending in Las Vegas, said "giving $35,000 to people may be
happening in New York which is a judicial foreclosure state, in which the foreclosure action needs to be
processed in front of a judge."

"That means with 18 months to foreclose, a short sale would be cheap considering lost payments for that
amount of time. "