The newest trend of the house party these days is causing yet another problem for mortgage lenders. Borrowers who have been foreclosed have begun to call their lender with a demand of their own - cash for the keys or else.

The “or else” is the borrowers will pack up all of their personal belongings and then begin removing every thing else they can. Some people leave the house completely trashed with giant holes in the walls, permanent substances poured on the carpets, floors pulled up, electrical systems removed, as well as all of the appliances. And that’s the short list. Lenders are learning that if there is any possibility that John Q. Borrower will just move out, causing no damages, they have to make it worth the borrowers while to do so.

Kenneth Blanton of Coldwell Banker said, “A lot of the people feel they lost the American dream.” He said many homes are stripped of their stoves, water heaters, electric wiring, and even hardwood floors. The cost can add up into the thousands.Not only hurt and frustrated homeowners are leaving their properties damaged and ransacked, but some is caused by criminal activity and migrants. It’s become the “norm” from the west coast to the east coast.In order to solve the problem, lenders will offer a “cash for keys” arrangement. The motivation is for property owners to leave the home quickly. If they are moved within three weeks, the mortgage lender will pick up the check. Homeowners are being paid as much as $2,000 in exchange for the keys and a promise not to demolish the house.

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This entry was posted on Monday, June 9th, 2008 at 6:38 pm and is filed under Mortgage Crisis. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.