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.
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  • I just closed a Chase short sale in which the owner qualified for.... $10,000 relocation assistance, paid on the HUD-1 to her in the form of a check at closing.
  • I meant that the homeowner would probably be encouraged to move out quicker.  Also, I guess I've been lucky,  The banks I've worked with require that I pay up to $1,500 out of pocket and then be reimbursed.  If the CFK's exceeded $1,500 the bank has handled it.

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