Miami homeowners, along with the rest of the state, have been hit hard by the foreclosure crisis. But help may soon be on the way for those who have fallen behind on their mortgage payments. According to the Financial Times, federal regulators recently asked the nation’s five biggest mortgage lenders to begin a program that is being called “cash for keys.”
Effectively, this program would pay people who are living in foreclosed upon homes. Homeowners or tenants would receive payment in exchange for leaving the property in good condition.
Foreclosure is an overwhelming problem in Florida as well as the rest of the country. According to the Financial Times, more than 4.5 million Americans are at least 90 days behind on their mortgage payments. That means that many homes are about to be in foreclosure, and the lenders need to figure out a way to manage the process as fairly as possible.
The cash for keys program would provide $1,000 for homeowners who want to seek financial advice from someone other than their mortgage lender. They could also receive up to $20,000 if they leave the home quickly. Homeowners or tenants living in properties that are in foreclosure would only receive the money if they leave the home in good shape. That money could be used to make a “fresh start” somewhere else.
Obviously, the lenders are not keen on this idea. However, some industry analysts suggest that it could benefit the lenders as well as homeowners. By offering cash to struggling homeowners, lenders can ensure that the occupants will leave the properties quickly and without vandalizing them. That could be enough to convince the major lenders that this program is a good idea.
Source: San Francisco Chronicle, “Can’t pay the mortgage? Maybe the bank will pay you to leave,” Anna Marie Hibble, 3 May 2011
