Banks, it would seem, are eager to move troubled mortgages off their books and may be turning to giving monetary incentives to people to have them sell their properties and move on, reports Bloomberg. Another word for this process is short sales.
Generally, lenders have been against short sales, because a short sale requires them to accept less from a buyer than what the loan is worth.
However, now banks are finding that doing a short sale is often faster than going through a foreclosure. And this is prompting some banks to encourage short sales by pre-approving deals. In fact, Reuters reports that this version of doing a short sale a heartening development, writing:
More generally, it makes sense that once a homeowner has been living in their home for a year or more without making any kind of rent or mortgage payments, they start getting quite comfortable with that lifestyle ... Cash incentives can work much better than lawsuits, especially when there are title problems.
If you choose a short sale of your house it might go something like this. First, you would list your home with a qualified agent. This agent would get the bank's permission to do a short sale. They would then gather several offers and submit them to the bank. The highest one wins and the bank would approve.
What it means for you is that you would stay in your home until ownership transferred to the party that bought it. They may even work out a way that you could rent it back for a period of time giving you enough time to move -- but that's up to the new owner though.
Short sales seem to be a happy medium between immediate foreclosure and long-term stasis. To learn more about it do consider speaking to a real estate attorney.