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Can’t pay the mortgage? Maybe the bank will pay you to leave

t’s the kind of news that seems to defy all logic we’ve ever been taught about financial responsibilities and rights in the real estate world. Now, says the Financial Times, banks are considering paying cash-strapped “homeowners” to vacate foreclosed properties. According to Times article, the “five biggest US mortgage servicers were told this week at a private meeting with regulators to consider paying delinquent borrowers up to $21,000 each as part of a broader settlement of the foreclosure crisis.”

This proposed program, cutely named “cash for keys,” asks that America’s biggest lenders, (including, possibly, Fannie and Freddie, as well as Bank of America) pay an incentive to get borrowers to leave their homes quickly, and in good condition.

Why would banks even consider this?

An estimated 4.8 million Americans are currently 90+ days behind in their mortgage payments, meaning that many homes are about to hit foreclosure. Among this huge number of borrowers, many would, under this program, be eligible for “up to $1,000 to seek independent financial advice and up to $20,000 in cash as a ‘fresh start’ payment towards living costs in a new home.”

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