The Cash-For-Keys Option in Foreclosure

Foreclosure isn’t an easy process for anyone involved, including the lender.  There is a mountain of paperwork involved and extensive legal fees—two things that are never very attractive prospects.  This is why some banks have developed protocol for making the process as painless as possible, and have implemented solutions like “Cash for keys” to get homeowners out of the house.

 

Cash for keys is exactly what is sounds like: homeowners will be given the offer of cash in exchange for agreement to vacate the home after a certain period of time.  Usually, these agreements include waivers that the homeowners will not vandalize the home or strip it for items to sell, and will leave the home in good, clean condition when they vacate.

 

The reason banks are not hesitant to offer cash for keys is because the foreclosure process is a time-consuming, costly enterprise.  If they can vacate the homeowner with his/her consent through a cash incentive, they will often jump at the chance.

 

Some of the expenses considered when a bank negotiates their cash for keys terms are:

• A security deposit and first / last month's rent for a new home
• The cost of hiring movers or securing a rental truck
• Utility deposits
• Temporary living quarters such as a motel

If you have been offered a cash-for-key option in the Miami area and are not sure if the offer is reasonable, you need the expertise of a debt relief attorney.  There may be other options available to you such as Chapter 7 or Chapter 13 bankruptcy that will allow you to keep your home and not put your family through the difficult process of changing residences.   

What are the Effects of Foreclosure on a Community?

The foreclosures that swept the country during the latest recession have had a devastating impact on many families.  However, the negative effects of this crisis didn’t stop there—communities were also greatly impacted by foreclosure rates.  Although surprisingly few studies have been completed on the topic, there is evidence supporting the fact that foreclosures have a deep and lasting negative impact on communities, as well.   Here is what the research found:

• An increase in theft—when homes are abandoned and banks fail to resell them in a timely fashion, it creates the perfect situation for thieves to take advantage.  Everything from the copper wiring to the appliances within a home (such as air conditioners, water heaters, refrigerators, stoves, and toilets) becomes up for grabs when there isn’t a watchful eye on the property.
• An increase in vandalism and vagrancy—foreclosed homes are primary targets for vandals and vagrants, resulting in additional costs needed to restore or repair the home for potential homeowners.
• Local governments suffer—when there are multiple homes in a particular ward that are foreclosures, property values lower and there is a smaller tax base to support the local government. According to the Center for Responsible Lending, “Over 44 million homes in the United States will experience property devaluation as a result of foreclosures in their neighborhoods. Forty-two counties in the United States can expect to see their property tax base erode by more than $1 billion.”
• Youth experience stress—according to the Center for Responsible Lending, “it is estimated that over 1.95 million youth are affected by foreclosure.”  Not only do foreclosures directly affect the stress level and stability of the children who lose their home, they also directly affect the children left in the neighborhood who experience their neighborhood’s value decreasing.  A smaller tax base affects everything from neighborhood school budgets to playground maintenance and safety.  

Using the FDCPA in Foreclosure Defense

If your home is under the threat of foreclosure, you are likely overwhelmed.  In addition to the harassing phone calls, homeowners facing foreclosure also have to try to “keep their head on straight” and make important decisions that affect their family’s lives—something that is almost impossible to do when a creditor is calling you multiple times every day.  This situation can certainly wreak havoc on anyone’s level of ability to handle stress, which makes fixing the problem even more difficult.  However, there is good news.  According to Section 805(a)(2) of the Fair Debt Collection Practices Act, your lender is prohibited from calling you about your home’s foreclosure if they know that you are represented by a lawyer.

 

That’s why if you live in the Miami, Florida area and are facing the threat of foreclosure, it is extremely important that you reach out to a qualified bankruptcy attorney who can help you find ways of debt relief such as Chapter 7 or Chapter 13 bankruptcy.  This kind of relief provides a legal means in which you can not only potentially save your home from foreclosure—you can also stop the harassing phone calls and stress related to them.   This “breathing room” will give you time to think clearly and do everything within your power to save your house and save your family the turmoil and emotional trauma of having to move out of the place they know as “home”.

If your lender harasses you after seeking counsel in a foreclosure, they will be in violation of both the Federal and Florida versions of the Fair Debt Collection Act.  Once you have told them the name and phone number of your attorney and that you don’t want them to contact you anymore (and sorry just shouting “Speak to my attorney” doesn’t work), any further phone calls from them could result in $4,000 fines for them and the opportunity for a lawsuit from you.  In our office, we deal with hundreds of collection calls each week so that our clients can have peace of mind when their phones ring.  It’s only been on rare occasions that we’ve had to remind the collection agencies about the law.

The Importance of Showing up in Foreclosure Lawsuits

Woody Allen—the famous writer, actor and director—once said, “Eighty percent of success is showing up.” This statement is especially true when it relates to foreclosure defense and showing up in court.

 

When you get your first foreclosure notice, it may seem like the end of the world.  Visions of shame, horror, embarrassment and living on the streets may fill your mind.  Take a deep breath.  (Note- if you get a notice that says your property is going to be sold on a specific date, stop reading the rest of this article and speak to a bankruptcy/foreclosure defense attorney now.)

While your first reaction might be to ignore the situation and hope that it works itself out, not showing up to court is the worst thing you can do. You run the risk of having your foreclosure go through much more quickly than if you had taken a few simple steps to slow the process down.  So, when you get the foreclosure notice go speak to a qualified bankruptcy and/or foreclosure defense attorney, but no matter what, don’t miss that court date.

A bankruptcy attorney will be able to assist you in preparing foreclosure defense and can potentially help save your home through Chapter 13 or Chapter 7 bankruptcy.   

They’re Taking My Home: Understanding the Foreclosure Process

When you receive a foreclosure notice for your home due to unforeseen financial circumstances or lost wages, it’s natural to immediately give up hope and think that it’s over—there’s nothing you can do to save your home.  This is simply untrue.  The foreclosure process is a long, paperwork-heavy procedure that can take several weeks (or even months) to progress.  It begins with the foreclosure notice but this notice doesn’t mean that you’ve run out of options.

 

The best way to not give up hope when you receive your foreclosure notice is to understand the foreclosure process so you’ll have more incentive to make the right choices to save your home during this critical time.  With this understanding, along with the right help from a qualified professional, your foreclosure can be stalled until you have time to get back on your feet.  It can even be completely avoided!

1. When you receive missed-payment notices

Many banks have a grace period for which they allow homeowners to be slightly late on payments.  For some, this grace period is 5 days, for others it is 10 days, and for others it might be 15 days or more.  When you miss your payment, the first thing you should expect to receive is a missed-payment notice.  As long as you send in your payment by the date given to you on this notice, your mortgage will be in good standing.  Many mortgage companies require a late payment, however, if the payment is made within the grace period.

 

2. When you receive a notice of default

Homeowners typically receive a notice of default (NOD) when they are 30 days or more late on their mortgage payment.  This notice gives you a certain number of days to make the mortgage current or run the risk of foreclosure.

 

3. When you get the foreclosure notice

This notice will generally give you the total amounts due, including interest owed, and the contact information for the mortgage company’s attorney.  After you receive this notice, it could be anywhere from 15 days to 15 months before the home goes up for auction on the foreclosure auction block.  The amount of time will depend largely on your lienholder’s regulations and the amount of foreclosure “backlog” they have to work on.  It will also largely vary depending on your location and how many foreclosures are happening within your area or municipality.