Wachovia offers cash to spur homeowners into 'short sales'

Wachovia Corp. is offering its borrowers money for selling their houses short, rather than going into foreclosure.

Homeowners with Wachovia mortgages who are upside down on their property can get 1 percent of the price of their short sale, with a minimum of $2,500. The incentives only kick in once the deal closes.

In a short sale, borrowers get their lenders' permission to sell their property for less than they owe in loans.

Homeowners are often unfamiliar with the concept of a short sale, and the deals have a well-earned reputation for causing heartburn -- often taking nine months or longer to get approved by lenders. As a result, many homeowners allow themselves to fall into foreclosure.

Lenders typically say a short sale is quicker and less costly for them than a foreclosure, but Wachovia is being unusually aggressive in converting potential foreclosures into short sales.