Cash for Keys: Is It for You?
For years, this program has been somewhat hidden from homeowners facing foreclosure. As the number of foreclosure cases grew into the thousands during the last couple years, more and more soon-to-be evicted families learned of the opportunity, whereby mortgage companies give money to the homeowners in exchange for handing over the keys to the house and leaving it in “broom-swept” condition. It is a way for the mortgage company to save money on litigation costs while ensuring the property will be well-kept until they can find a buyer to move in. Additionally, the homeowner is given a little help with moving expenses and the certainty of a move-out date.
Although the number of foreclosures filed in Lee County went down from 375 in April to 345 in May, mortgage companies are still offering cash in exchange for the keys to these homes. With the large number of homes that have been sold in foreclosure proceedings, mortgage companies are concerned with the homes being left vacant and being vandalized. This causes problems when the bank goes to sell them. So, they are sometimes willing to offer the homeowner money to make sure the property is maintained.
Things you’ll want to be aware of are that the amount of money offered may be higher if you agree to an earlier move-out date; the agreement should be in writing and should define the conditions that the home is to be left in upon move-out; and make sure you know how and when you are getting paid. Will the mortgage company come out and offer this to you? Probably not, but you should be aware of it so that you can ask them. Please also keep in mind that even if the bank agrees to pay you money upon moving out, this does not mean they have agreed to waive the right to come after you for the deficiency. That is something else that would need to be negotiated and is generally not included in the cash-for-keys program.
This blog was written by Attorney Danielle Zemola of The Dellutri Law Group, P.A. Ms. Zemola defends homeowner in the foreclosure process and in the Bankruptcy Court.
