Northern Virginia Residential Blog-Samson Realty

Are you foreclosed? Get Cash for Keys

If a house is being foreclosed, the homeowner says goodbye to a burdensome mortgage payment, but that's the not end of his problems.  He still needs to find another place to live, put down the deposits there, and pay to move - a big outlay of money that could exceed a mortgage payment.  From the lender's position, dealing with the foreclosure involves more than closing an account with a delinquent borrower.  The bank has to resell the home, often at a loss.  One thing the bank does not need is to find the property trashed or vandalized by former owner.

To encourage former owners to leave the property in good condition (AND to LEAVE the property), the Cash for Keys program in effect at many banks is available to those who inquire about it.  The banks pay $1,000 (or more) to owners in foreclosure to turn over the keys and vacate the property by a certain date.  The money is to be used for expenses such as security deposits, movers, rental trucks, utility deposits, and temporary living expenses. 

In return, the homeowner agrees to leave the space "broom clean" and agrees not to strip the home of light fixtures, appliances, or copper plumbing, destroy it in any way, or leave pets behind.  Many people forced out of their homes are angry at the bank and have been known to lash out at the property. Others are so overwhelmed with grief they let things go until the day they have to leave. Others, unable to afford an extra four-legged mouth, leave cats and dogs behind.  What it costs the bank in repair, clean up, and eviction costs is far in excess of the cost of cutting a Cash for Keys check.

Those who participate in the program not only have some cash to work with at moving time, but also retain a little dignity and some control over when they leave - in contrast to having the sheriff come to the door.  To participate, the homeowner has to inquire about the program with the lender.