Cash for Keys

“Cash for Keys”

A “cash for keys” deal is when you work out a deal with the bank where you give up your home in exchange for a cash payment for relocation assistance, a release from the mortgage debt, and an extension of time in which to move. For example, under a typical “cash for keys” deal, you may receive a check for $5,000.00 to assist you with relocation expenses, a release from the mortgage debt so you don’t owe the bank any more money, and another four months in which to vacate the property. If you are looking to walk away from the property, this could be an option for you.

Remember the credit reporting implications here too. If you do a “cash for keys” deal, you will agree to a Final Judgment of Foreclosure being entered against you so the lender can foreclose on the property and put it up for a public auction. You do this in exchange for the lender providing you with the monetary assistance and the extended period of time in the property. If the default on your loan was sometime in the last seven years, the Final Judgment will most likely report on your credit report as an adverse entry and will negatively impact your credit score. This could create problems for you when you try to get approved for an apartment or for another home. The upside, however, to a “cash for keys” deal is that these deals can usually happen pretty quickly, and you usually do not need to complete much paperwork. These agreements are usually negotiated by the respective attorneys.