While most of us agree that that walking away from a home just because the balance on the loan is higher than the current value is wrong, there are those that simply can not make their payments. This may be the result of factors out of the borrower’s control (things like job or other income loss, the inability to sell after a relocation, etc) or because the loan has rolled over into its high interest rate.
For these families being forced from their home is often a traumatic experience, sometimes leaving them with no place to live. For these folks the Cash-for-Keys programs were developed. Basically, if they agree to leave the home in good condition and in a timely fashion the bank hands them some money to help with move-in deposits, moving costs, etc.
This makes economic sense for the bank also. They save on the costs of eviction and the monies lost during the process. They know the condition of the home and are assured that the vacating occupant will not remove appliances or otherwise vandalize the home. It also puts them in charge of the time line of events, decreasing the chances of vandalism after the home is vacated.
Like so many things, the unsavory have found a way to use this, taking advantage of unwitting people desperate for help. The problem has now been addressed by the California Department of Real Estate (DRE). They have released an advisory for both the public as well as agents on this topic. To read that complete article click HERE.
If you or someone you know would like to know more contact us via email or phone at 530 315-2808. At Yuba Sutter Homes and Loans we have the people with the experience and compassion to help others through this tough time AND protect their rights.