Cash For Keys Policy - All That You Need To Know

Published by Tony Philip in Banking, 6 months 2 weeks 6 days 23 hours 29 minutes 8 seconds ago

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Cash for keys policy is a part of agreement drawn between the bank and the parties. The idea is mainly for the banks to take back the foreclosed home in good condition. This agreement includes that the house should be cleaned and should be vacated in a good condition. Also, the date on which the house is to be vacated is also mentioned to avoid any confusion.

Banks are generally not in the business of owning properties, but in case of taking hold of the title of a foreclosed property, they become responsible for it. This simply means that if the bank has to spend a load of money to repair the damages caused by the occupants then that increases the loss for the banks. At times it also costs the banks a pretty penny to get rid of a house owner or a tenant from a foreclosed home.

Banks do not generally offer "cash for keys" automatically unless and until the occupant approaches them. The expenses which are usually expected to be recovered would be the movers and packers charges, the rent for the truck, the first or last month's rent, the security deposit and in some cases a temporary living quarters for the time being.


Sometimes the banks also pay a bonus to those who agree to move out immediately without fuss. But in case the house owner/tenant tries to extort the bank or take advantage of them, this offer could be withdrawn. This offer is mainly for those who are courteous and pleasant in their dealings with the banks. The banks opt for this method mainly because it sometimes costs them thousands of dollars to evict a tenant or a home owner. Taking the matter to the court is extremely time-consuming and a lot of effort on the bank's part. The sum the banks pay in such cases is usually negotiable. This policy is a way to be reasonable and advantageous to both the banks as well as the party concerned. For the banks this is saving time on the eviction process. This policy is sometimes also termed as relocation assistance and this minimizes the time between a foreclosure sale and listing the property. From a personal point of view it saves the foreclosed homeowner the disgrace faced when driven out of one's own home.

For this policy to be successful it is important that the incentive which is offered by the bank is tempting enough so that the occupants opt to sign such an agreement and agree to shorten their stay and definitely leave on a specified date. Banks should also ensure that a decent time is allocated to the occupants to vacate and relocate. With these points in mind, the cash for keys policy works out for both the parties and avoids a lot of unpleasantness.

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