The Federal Deposit Insurance Corporation (FDIC) Chairman, Sheila Blair, has raised a proposal regarding “cash for keys” (CFK’s). The proposal is encouraging the five largest U.S. mortgage servicers to consider a CFK’s option for 90-day plus delinquent borrowers that would pay them as much as $21,000 to move out! According to The Financial Times, the proposal was not well received .
In the beginning of March 2011, the proposal was given to the servicers with the intent of revising and coming to a final draft in two months. Nearly half of the 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 Reuters, the Office of the Comptroller of the Currency is not supportive of Blair’s proposal and is working on a draft of its own.
With CFK’s offers typically being about $1,000, it will be interesting to see the outcome. In any event, increasing the amount will certainly make our jobs a little easier.