Cash for keys options

Cash for keys options

Our office often negotiates cash for keys options for Louisville foreclosures at the end of the case. When you eventually move to a new home, there is no advantage in keeping possession of the house after you are out. In fact, there is the issue of building code violations if you are not living in the property because people injure themselves, making you liable. You don’t want to move out too early because of the fact that every month you stay in the home is a rent-free month. But, mortgage lenders are often happy to avoid further litigation by your exchanging the keys and possession for a cash sum, usually $2,000 to $5,000 dollars. When you are through litigating in state Circuit Court, it’s time to see if there is one last asset you can get from the foreclosure.

Cash for Keys

Cash for keys options for Louisville Foreclosures is a simple program.  The disadvantage is it speeds up foreclosures. Usually, you get paid about $3,000 to $5,000 dollars to move. You lose the right to stay in the home rent-free. If you now have to rent a new home, do the math. If rent is $1000 a month and you move a year early, you lose $12,000 dollars to gain $3,000. Often a foreclosure takes two years or longer. Filing an answer delays the process six months or longer. Then, sending out discovery takes another six months or longer. Filing bankruptcy after that often delays the process an additional six months or longer.

Now you may have money to move but, that’s when the bank eventually sends it.  Moreover, the amounts vary a lot. Also, the lenders vary the offers from case to case, and some lenders don’t offer anything. What you lose is possession. The property remains in your name until the deed is out of your name. Handing over possession doesn’t transfer the deed.

Cash for keys options for Louisville Foreclosures require the following:

  1. You have to vacate by a specific date.
  2. The property must be returned broom clean in good condition and the fixtures in place.
  3. You turn over the keys, and they inspect the property to verify the condition.
  4. There is no debris trash or furniture left behind in the house or yard.
  5. Just they pay you $3,000 to hand over the keys does not mean that you won’t still have a deficiency from the foreclosure or that you won’t have a 1099 tax problem from the mortgage company writing off the debt. You may still need to file a bankruptcy to prevent yourself from being sued later. However, if it is time to abandon the home, the cash for keys option does allow you to move on.

Foreclosure Rescue Scams

Only the mortgage company or their attorney offers you the cash for keys option. Many scams are proposed to homeowners, such as signing over your deed to someone who will lease the property back to you. But, even if you sign over the deed, if the mortgage isn’t paid at the transfer, the home often eventually goes into foreclosure anyway. So, you might face eviction instead of leasing the property. You also remain in default on the mortgage. At that point, the property is usually resold, leased to someone else, or stripped.

Therefore, it usually is best for you to remain in control and sell the home, lease it, or keep the house. If someone is offering “foreclosure help,” they are most often helping themselves, not you.  They are looking for ways to resell the home, rent the house during the foreclosure, or perhaps even strip the home.  You get the deficiency judgment and the 1099 tax problem.

It is essential to review offers with an attorney.  It is worth the 100 dollars to see what an attorney thinks of a deal. Often these foreclosure rescue offers are deals that steal your equity. The cash for keys option is not a bad option for someone that has to move on and is no longer interested in living in the home. But defending a foreclosure may be a better option for someone who can live in the house rent-free while it takes 1, 2, or 3 years to process a foreclosure.

Are you facing foreclosure? Contact my office right away to start the conversation. Nick C. Thompson, Attorney: 502-625-0905

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