Everyone is well aware of the housing crisis and the amount of foreclosures that have taken place these past couple years. While most people are terrified of foreclosure, believe it or not there are actually some people who foreclose on purpose and may want to leave their home as soon as possible. Many people do not how how to speed up the foreclosure process so they can move on with their life.
This is where “cash for keys” may come into play to help with your situation.
Cash for keys is sort of like a cash settlement offer from the lending institution to the homeowner in exchange they vacate their foreclosed property. The advantage of this from a lenders point of view is the fact that the borrower is leaving the property prior to the eviction, often times leaving the property in a better condition than if they were forced out of the home. Sometimes borrowers will destroy the home if they are forced out of the property by breaking windows or taking out major items such as toilets, doors, etc. The extra cash usually makes these homeowners more humble to the fact that the bank is actually willing to offer assistance in a time of need.
In most cases cash for keys comes into play once the lender initiates foreclosure proceedings on the property. Sometimes the lender will make an offer anywhere from $1,000 to $3,000 for the homeowner to vacate the property before foreclosure proceedings have been finalized. If the homeowners agrees to the offer than the property reverts back to the lender and a moving date is scheduled. In some rare cases the borrower can negotiate the amount. But generally speaking it will not be higher than $3,000.
Banks also favor this option because it helps them avoid the extremely expensive and time consuming process that comes along with foreclosure. Instead of going through this process and leaving the house be for many months without a profit, lenders offer this incentive to get the house back on the market asap. Lenders typically lose a significant amount of money during the foreclosure process.
This is also a great advantage for homeowners who cannot afford to pay their mortgage because they can use these funds to begin a new life. As we all know moving can be extremely expensive and a down payment is generally required no matter where you move. This money can be used to help with moving expenses or to secure a new place with a decent down payment.
If you are one of thousands of homeowners across the nation who have defaulted on their mortgage you may want to cash for keys. But do not do so until you have exhausted all options. This is good because it will provide extra money to move but you want to do everything you possibly can to avoid foreclosure because it may come with nasty consequences.