After years of headaches and heartbreak for Realtors and homeowners trying to complete short sales, lenders finally seem to be speeding up their short sale programs – at least for some.

Brokers who specialize in short sales report they’ve completed deals where the former homeowner walks away from the closing table with as much as $30,000 in cash.

Banks have long had “cash for keys” programs in place which offer a few thousand dollars to incentivize badly delinquent borrowers to move on and avoid lengthy eviction battles. The federal Home Affordable Foreclosure Alternatives (HAFA) program also offers up to $3,000 in relocation funds for borrowers who complete a short sale.

“I have a couple people who are years behind, and they’re generally flagged into these programs where they get a few thousand dollars,” said Minna Reid, an agent in Connecticut who specializes in working with short sale clients. “It’s just to incentivize the people to [complete a] short sale rather than foreclose…Bank of America just seems to never foreclose anymore.”

But these new cash at closing deals are different.

More To Come

Rather than a borrower approaching the bank for help, in these cases banks are sending “solicitation letters” to borrowers, often those who’ve sought and failed to get a loan modification. The loans in question are those held on the bank’s own books. And Realtors who deal in short sales report completing sales with banks like Citi, Bank of America and Chase where borrowers walked away with $12,000, $20,000 or even $35,000.

Anthony Lamacchia, broker/owner of McGeough Lamacchia Realty in Waltham, which specializes in short sales, completed a sale involving a Chase loan in which the borrower walked away with $35,000 in November.

“I can guarantee we’re going to have more, because we’re working on more now,” he said.

Gina Braza, a real estate attorney and principal in the Boston office of law firm Alavi + Braza PC, says she too, has worked on several such deals.

“I’ve begun seeing this [type of] money from people over the last year,” she said.

Four years into the foreclosure crisis, it seems banks have finally come up with a way to separate the sheep from the goats.

Loans which may be in default and yet potentially salvageable through either a private or government sponsored modification aren’t getting the offer.

But for loans which may have been delinquent only a short time, but which the bank determines will be headed straight down the tubes if left to rot, owners are getting early cash offers in an effort to nip the problem in the bud.

Banks have wised up to the fact that if a homeowner can’t pay their mortgage, it’s very unlikely they’re keeping up with maintenance and repairs – which can cause progressive deterioration in a home’s value. Add the months’ worth of legal fees they’ll have to spend as they go through a lengthy foreclosure process; substantial maintenance fees and management fees required to keep up the properties once the owner does move out; and hefty discounts expected by buyers willing to take on distressed property, and all of a sudden even eye-popping offers of $20,000 and $30,000 cash on the closing table become more reasonable.

Cheaper Alternative

And it’s not necessarily all high-end properties that are receiving such offers.

“When Chase first came out of this program, it was kind of known, though they wouldn’t admit it, that they were doing them on higher-end properties,” said Lamacchia. But two of his recent deals where the former owners received $30,000 and $20,000 involved properties worth approximately and $300,000 and $100,000, respectively.

A Chase spokesman confirmed the lender has been sending out the letters for about a year, and that it monitors homeowners for eligibility and flags people who appear to be struggling to pay their mortgage, but declined to explain what criteria the company uses to determine eligibility.

Bank of America, Citi, and Wells Fargo did not return calls seeking comment, though brokers say they’ve seen similar offers from them as well, generally in the $10,000 to $20,000 range.

But there’s one big caveat to the bonanza: All the offers seen so far seem to have involved loans being held by the banks themselves, which make up only a small portion of the delinquent loans in the country. Those loans held by Fannie and Freddie or locked in securitized investor pools aren’t eligible, and processing them still often drags on for months.

Brokers say if every short sale was incentivized so aggressively, the housing market might work through the problem loans quicker and cheaper.

“But can you imagine what would happen if the Republicans in Congress found out that borrowers that weren’t paying their mortgage were getting paid $30,000 by Fannie and Freddie? They’d go crazy,” said Lamacchia. “But when you break down the numbers, and look at it, it is cheaper.”