After reports that the largest mortgage servicers, some attorneys general, and even some government agencies are not comfortable with the terms in the proposal to settle robo-signing allegations, there has been renewed effort to try to come to a solution that works for all parties. Now, the nation’s top five mortgage servicers have reportedly been encouraged to consider a “cash for keys” option for 90-day plus delinquent borrowers that would pay them as much as $21,000 to move out.
According to an article by The Financial Times, the five biggest mortgage servicers in the United States were encouraged to consider a “cash for keys” option for 90-day plus delinquent borrowers that would pay them as much as $21,000 to move out.
Traditionally a cash for keys option offers between $1,000 and $3,000 for a borrower to vacate the property within a defined time frame. The borrower is forgiven of the mortgage debt in exchange for the deed to the property, and the money can help provide for moving expenses.
The proposal was given to servicers with the intent of revising and coming to a final draft in two months. Nearly half of that time has passed without significant strides, and many are worried that the process could be stalled at a time when a solution is considered necessary for recovery. According to the news source, the proposal was raised by Federal Deposit Insurance Corporation (FDIC) Chairman Sheila Bair, and was “not well received by the audience.”
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