You don't have to pay the sellers just change the mortgage underwriting guidelines so that after a short sale where the seller fully participates (not someone who milked the system to live for free as long as possible) you can buy a home. How about take the number of mortgage payments missed multiplied by a factor say 2, 3 or 4 + a base number ( say 3 months) and that is how long a buyer has to wait to buy a new home after a short sale versus the 3-4-5-7 years they have to wait for allowing the house to go into foreclosure.
Do this and you'll get much better participation and you dont' have to use more taxpayer TARP-funded money to give to overextended homeowners.
Posted by Ben Nicolas
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