A new face for CASH for KEYS / Deed-in-Lieu of Foreclosure: a Win-Win for Homeowners & Mortgage Lenders

The term Cash for Keys is not new.  Over the last 2 couple of years, we have seen a great deal of cash for keys offered to occupants that still living in the foreclosed properties.  This offer is in lieu of eviction. "Cash for keys" may be one situation where it is a win-win situation for both the mortgage lenders and the homeowners.

Advantage of the Cash for Keys program: 

• Homeowners get money to help the relocate
• Incentive for homeowner to get out of to get out of their homes quickly with minimal repercussion
• Incentive to bank/mortgage holders to be a part of the FAP program

Now with the FAP (Foreclosure Alternative Program), Cash for Keys is an incentive for homeowners that are in the position of:

• Not being able to qualify for a loan modification
• Not being able to do a Short Sale
• Bank offering them Deed in lieu of foreclosure * please note: there are situations where the bank will not give the cash for keys offer to the homeowner, but will still offer the deed in lieu of.

How does it work?  The "cash for keys" program is technically known as a deed-in-lieu which allows the bank to take a property back from a delinquent homeowner who can no longer afford to make their house payment. To take advantage of the Foreclosure Alternative Program, the home owner must not qualify for a mortgage modification or a short sale.

The "Target" homeowners:

• who are unemployed
• upside down on their home values
• or going through a critical event such as divorce, death, future job loss, etc.

How can a Homeowner get Cash for Keys?   First the homeowner has to denied the loan modification and Short Sale due to the fact that they are not qualified for either.  The bank will then offer the homeowner the deed-in-lieu program.  The bank pays the homeowner an incentive (usually $1,000 to $5,000)to move out of the home on a specific date and leave the home in good condition. In doing so, the bank agrees not to charge the homeowner back for the difference in what it eventually sells for and what they owe.

Are there any glitches in this option?  Yes.  A second mortgage or other debt on the home can cause a lender not to offer "cash for keys". The owner of the second mortgage or debt must agree to give up all their interest in the property. Under the Federal Alternative Program, the second mortgage holder may also receive up to $1,000 when they waive their rights.

WEBSITE: http://www.motheranddaughterrealtyteam.com

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Take a look at Mother and Daughter Blog and D'Adrea's Mother and Daughter Blog  - for other tips for Sellers and Buyers. I work with my daughter as the Mother and Daughter Real Estate Team at Family Realty Group and we also focus in Short Sales and the Pre-Foreclosure process and REOs/Bank Owned Properties.  Our aggressive marketing plan includes on-line listing advertising. 

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If you are thinking of selling or buying a home in Northern California's Central Valley (San Joaquin, Alameda, Contra Costa and Stanislaus Counties - includes Stockton, Manteca, Tracy, Lathrop., Salida, Ripon, Modesto, Lodi, Hayward, Castro Valley, Union City, Fremont, Newark, Livermore, Pleasanton, Dublin and all surrounding cities). Call us at 866-750-8282 or email at US.