As delinquencies on home loans slowly decline, the five biggest US mortgage servicers are looking for new and creative ways to foreclose on properties. Their new proposal is called “cash for keys” and it is an offer to bribe delinquent homeowners to leave their house in exchange for a small sum of cash. This proposed tactic is in response to the scrutiny that the mortgage providers have been under for their failure to accurately document the seizure and sale of tens of thousands of homes.
These mortgage servicers’ documents have been criticized for being sloppily put together and in many completely missing. The poor condition of these documents have made for great legal battles between lenders and attorneys representing the homeowners.
Now, the proposed “cash for keys” is a way for the mortgage servicers to sidestep the potential legal problems facing them when trying to foreclose on a property. They are asking homeowners to sell their rights on their home for a small sum of money. Doing so may permanent extinguish a homeowners right to challenge the attempted foreclosure.
Before accepting such an offer, homeowners should discuss their options with an attorney.