Banks Write Five Figure Checks to Delinquent Homeowners

It may sound crazy, but according to an article on CNNMoney, banks such as Chase, Bank of America and Wells Fargo have been offering certain homeowners who are delinquent in their mortgage payments up to $35,000 if they agree to short sell their property.

The logic here is that the banks will save more by forcing a short sale than they would by allowing the home to go into foreclosure. The foreclosure process can go on for years, during which time the homes often fall into extreme disrepair, essentially costing the bank much more than the five figures these banks have been willing to pay the delinquent homeowners. Foreclosed homes also command a much lower market value than homes that are listed as shorts sales.

The banks state that these incentives are not offered to all homeowners; for example, many banks limit these incentives to certain states, such as Florida, where the foreclosure rate is so high.

This idea may be beneficial to the banks, but what message is it sending to the American consumer- here's a big fat check, but you can only receive it if you don't pay your bills?