Cash For Key's Program

By
Real Estate Agent with Seven Gables Real Estate

The cash for keys program has been around for many years but kept quiet by the banks until the sub-prime mortgage meltdown in 2007 forced many banks to initiate the cash for keys policy as standard procedure.

Two big problems banks face when taking a home in a foreclosure or short sale are, the condition of the home after it's occupants vacate, and getting the occupants to leave in a timely manner after the home sells. By giving cash for keys the homeowners are more likely to vacate in a timely manor and leave the property in better condition. By offering this incentive it encourages homeowners to do a short sale which ends up benefiting the bank as well as the homeowners.

The amount of cash the bank gives varies. However, It's usually between $2,500 and $3,500 but the average cash for keys is $2,500. I realize in the grand scheme of things that $2,500 bucks is not that much especially since just a few year ago your home was worth so much more.

A few things to keep in mind:

  • By doing a short sale the bank cannot go after you on a 1st mortgage (federal law)
  • If you qualify for HAFA the bank cannot go after you on a 2nd mortgage
  • Short Sale = $2,500. Foreclosure = a big fat ZERO!!
  • With a Foreclosure the bank can go after you for the entire amount owed
As you can see the cash for keys program and doing a Short Sale is a much better option then a Foreclosure.   

Comments (2)

Diana Mehnert
Coldwell Banker Harris McHaney & Faucette - Bella Vista, AR

This is something I have explained to a Friend last year, which she chose to with a short sale.  We got the house sold, with in 8 months of listing it.  The bank was great to work with, not like some that have 20 million hoops to jump through. Great post!

Mar 19, 2011 02:42 PM
Lisa Bear (RE/MAX REALTY CENTER) Waukesha,MilwWI Real Estate 2628935555
Buyers Agent/Luxury/Lake/REO, listing package options - Oconomowoc, WI

Great information.  Thansk for sharing and the best to you in 2011

Mar 19, 2011 03:26 PM