Cash for Keys for Occupants of Foreclosed Homes

In a recent cash for keys transaction, a tenant living in a property in Bakersfield, California, called me due to the notice that was posted on her front door by a contractor, who works for my property preservation company. She stressed her worries about having to leave the house she had been living in for the past five years. She wasn’t the owner, she was the tenant. She explained her continued ability to pay her rent on time despite her recent job loss, the situation with the children she has to support, and her possible inability to find another place to rent in the next three weeks.

Cash for keys is an offer made by the lender as an alternative to a more expensive and often time consuming eviction process. The lender offers the occupant(s) of the property some cash, which is determined by either the lender or negotiated between the occupant(s) and the lender. According to the lender, the benefit of the cash for keys is for both the occupant(s) and the lender. Their argument behind this falls in the ability of the occupant(s) to leave with some cash or wait for a sheriff to escort them through their eviction and be forced to leave without cash.

Many occupants feel the unnecessary need to fight back or additional costs without gain will occur if they do not take advantage of the situation being offered to them. The situation is very similar to the good cop bad cop situation in an interrogation room. Documentation will be offered (or sometimes forced) on the occupant(s) with a perception that leave them with positive alternatives. However, it is important to be aware of occupancy rights and the knowledge that once the necessary documentation (one of which is the Occupancy Termination Agreement) is signed, the rights to occupy the subject property are contractually surrendered.

The foreclosure market is affecting ALL individuals. The owners of the properties that are being foreclosed are not making their mortgage payments despite the continued payments made by their tenants. Many of these owners have experienced an unaffordable adjustment to their interest rate, job loss, and a variety of other issues. In any case, two families or lives are being affected by the loss of the subject property.

Cash for keys is an alternative to banks that prevent further loss of their depreciating investments. Depending on the current situation of the occupant(s), this may be an alternative to further any additional loss. However, occupants have rights too.