What is the “Cash for Keys” Program?
“Cash for Keys” is an opportunity offered by many mortgage foreclosure companies for the homeowners who are being evicted. The program can sometimes be known as “Cash for Redemption” as well. It involves mortgage companies giving money to the homeowner in return for the keys and the home turned over in good condition. This program is a win-win for both the lenders and the borrowers. This program helps the homeowner by giving them a little extra cash to move and the mortgage company by receiving the home in better condition.
Generally, the amount a mortgage company offers is a set amount that is higher if the homeowner moves quickly and is reduced if the move takes longer. In Michigan, a homeowner has a six month right of statutory redemption to redeem their home once it has been foreclosed on. Regardless, the homeowner will be required to be out of the home by a certain date when utilizing the Cash for Keys as an alternative to eviction. To get Cash for Keys from a mortgage foreclosure company the homeowner must abide by certain terms. Any personal belongings must be removed from property before the lender will tender a check to the homeowner. In addition, the lender will typically send out a real estate agent or broker to examine the property before the deal can be finalized.
Can the Mortgage Company Still Sue Me for the Deficiency?
Yes, a mortgage company could still sue you for a deficiency in spite of a Cash for Redemption agreement. However, we have been successful in negotiating with lenders to waive any deficiency against our clients. This is the key to negotiating a Cash for Keys agreement. Without such language in the agreement, you may find yourself eventually getting sued and having to file for bankruptcy protection if you cannot pay the deficiency.