Foreclosure Offense and Defense: Cash for Keys Offers, Pitfalls and Opportunities

In response to email from one of our readers who was presented with a “get out” notice and an offer to pay him $1,000 to do so peaceably, which was then later stated to be “negotiable (meaning they would pay more if asked), I wrote:

Sounds like you are on the right track. I am glad to hear you are still there.

If you are inclined to accept the offer, ask for more money. It can’t hurt.

Otherwise, you might want to ask for a copy of any document he has that names him as having authority to make the offer. He could be a scammer that will take the keys from you, make everything look all fine and dandy and then strip the house down right through the walls to the wiring and plumbing.

Then the lender comes in and files suit against you or worse files a criminal complaint against you for trashing the place.

While you are at it, you might want to ask for copies of the assignment or sale documents with which GMAC allegedly bought the mortgage and note. If you really press the point hard, you might get them or even better, you might not get them in which case they might back off completely, or they might negotiate something much more favorable to you.

In many cases, these purchases are not well-documented or they can’t find the documents. It is worth pushing this point.

If they don’t produce the documents you can make the allegation in your petition for BK that the liability is contingent and that your “asset” — the house is a contingent asset as well because it looks like GMAC took title under false pretenses. If things break your way you could end up with the house back and possibly without the mortgage if you announce your rescission due to failure to properly make disclosures in the TILA estimates and loan closing documents.

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