Karen Rivedal of the Wisconsin State Journal writes about how banks are offering cash incentives to delinquent borrowers to encourage short sales where homes sell for less than the mortgage due.
Her article starts with the story of one woman who received $20,000. She then writes:
“Cash incentives to short-sale sellers from the major national banks have become more common in the past year, in Dane County and around the country. The incentives get the attention of delinquent buyers and can convince them to stop holding out for a principal write-down or to stop fighting the foreclosure process in court, while they often live for free in the disputed home for a year or more.
To date, Chase has offered the most and biggest incentives, but Citigroup, Bank of America, Wells Fargo and Ally Financial have also made payments, according to the banks and other sources.”
Today’s Tip: Lean on local sources to get insight and bring to life national trends.
While working on a story looking back at 2011, Karen realized there was no data on how many short sales had occurred in her area. Peter Zarov, who handles closings and is cited in her story, gave her some estimated numbers and provided information about trends he was seeing in his office.
“Zarov was the first one to tell me about each of the three trends that I highlighted in the story, and that also turned out to be national trends,” Karen says.
That information didn’t make the year-end wrap-up, but became its own story.
Karen got anecdotal information about the increase by working her source list. She asked one agent to send an email looking for agents who could talk with her about short sales they’d done with big cash incentives.
From her real estate blog and previous coverage of short sales, she knew banks had become more aggressive in seeking short sales and approving them. “There were certainly no incentives in those early days,” she says. A Bloomberg story showed that the incentive push was happening nationally and also provided another source for her story, she says.
The banks in her story aren’t based in her area, so Karen says she searched for spokespeople in Wisconsin or the Midwest. She used that information for a sidebar.
“I thought a key part of the story would be getting the banks to defend their formulas and give me any stats they had short sales,” she says. “I couldn’t get them to explain the formula incentives, but they confirmed key things I’d gotten from other sources and gave me some stats.”