The least expensive option is the short sale. So the gubment's new idea is to offer incentives to the banks in order to get them to streamline the short sale process. Under this plan they will get another check from the government for every short sale they do. Ain't it grand, our tax dollars thrown away again.
Now, Even The Treasury Is Pushing Short Sales
Treasury is set to announce a new program to help troubled borrowers whose mortgages are deemed ineligible for modification. Speaking at the Mortgage Bankers Association’s annual convention, Ms. Maggiano said Treasury would set out the parameters under which servicers can earn financial incentives if they offer borrowers the option of participating in a short sale and deed in lieu of foreclosure. “There’s really no magic. We haven’t reinvented the wheel,” Ms. Maggiano told industry executives in San Diego. To cut down on the paperwork, the program will provide a standardized set of forms. It will also cap the amount of money that can be paid to subordinate lien holders who agree to waive their interest in a property. The government expects that some second mortgage investors will “walk away” from the program because the compensation being offered will be too little. But Ms. Maggiano, who is director of policy in the preservation office, told a standing room only session that by setting a limit, the White House is hoping to eliminate time consuming back-and-forth negotiations between servicers, borrowers and investors. “We are hoping to set an industry standard so investors will know exactly what they can expect,” she said.
The only incentive I see is one where the banks don't do anything until this gets passed. Why foreclose or approve a short sale now. Wait a month or two and get paid for it!