Most homeowners who are offered Cash For Keys instead of an eviction accept the offer. There are, however, a small group of homeowners who do not realize that working with the system at this point is in their best interest.
During the past few years, banks have offered Cash for Keys to a record number of homeowners due to a record number of foreclosures. Cash for keys is when a bank takes a property back and offer the occupant money in exchange for them vacating the home. Essentially, the bank is handing the occupant cash in exchange for keys to the house.
Cash for keys is a way for banks to save the time of going through the complete eviction process. The faster the home becomes unoccupied, the quicker the bank can fix-up, sell, or rent the property. Courts are backed up and so are sheriff’s departments with eviction requests. Sometimes it might take a sheriff’s department an extra few weeks to schedule the lockout even after it’s approved. Additionally, REO’s are often no longer being maintained by the homeowner so it’s in the bank’s best interest to get that person out as quick as possible.
Some homeowners think that they SHOULD NOT accept cash for keys. These people are usualy mislead or uneducated about the situation they are currently in. Real estate brokers and attorneys tell them they can get their house back, but at this point in the process, when they are being offered cash for keys, they are no longer the owner of the home. There is little to nothing they can do to reverse the transaction that has already happened. The lender already holds title to the property.
Another reason some people in this situation don’t accept cash for keys is out of anger. They are mad at how things went down and think this is their way of getting back at the bank. Unfortunately, they are only doing themselves an unjustice. Cash for keys is a way to avoid an eviction and also put some cash in your pocket to help with moving expenses, a deposit on a rental property, and possibly even the first couple months rent depending on where you go. More importantly though, is that the former homeowner will have a much easier time finding a landlord to rent to them without an eviction on their record.
Someone with an eviction on their record is going to have limited choices of where to rent and most likely face a higher deposit because they are a bigger risk for the landlord. They could have put themselves in a much better situation and had some cash left over. The end result is the exact same thing–they are not going to be living at the home anymore. The former homeowner could either leave with a check in hand and a clean record (no eviction), or leave with no money and the eviction.
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