Finally, one of my clients reported a common sense resolution to an upside down mortgage. This man’s primary residence in Florida, like so many other homes, was substantially upside down. Short sales did not work because buyers did not want to wait for the bank’s long approval process. The bank foreclosed. This case had a happy ending. The bank agreed to take back the property and give the man a full release of liability. Even more, the bank paid the man cash back to pay for his moving expenses. “Are you serious”, I asked. “Yes”, the man replied. Its “Cash For Keys.”
Yes, there are some mortgage lenders who will pay you to surrender your upside down house and move out. My client explained that the “cash for keys” offer is contingent upon the buyer delivering the house in good condition. The bank’s representative explained that many homeowners purposefully damage homes in foreclosure and remove appliances and fixtures. It makes sense. The lenders gets control of the property and can avoid its physical deterioration. The lender can more quickly put the house on the market and minimize its expenses. The borrower receives an unexpected cash reward for cooperation.
There have been press reports about cash for keys programs. These programs are not yet widespread but they may be increasing as mortgage lenders experience dissatisfaction with traditional foreclosures.
Last updated on May 22, 2020