Why a Buy and Bail should never be an Option

Some homeowners feel that it’s only right to throw their old home straight into foreclosure and buy a new one because they feel tricked by mortgagers and/or banks. This is called a “buy and bail”.

While homeowners may feel that they’re emotionally on the right side of the court, it’s not exactly legal, and could be reason enough for a new lawsuit coming their way.

Buy and bails involve lies

When you go into buy and bail schemes, you essentially sign falsified documents and lie on load applications. Homeowners who attempt to do this can be facing serious cases of forgery.

This only means one thing: when you go into buy and bail schemes to try to get the better of your mortgager, you can end up behind bars.

Foreclosure always means bad credit

While you may think that going into a buy and bail helps you dodge the bad credit consequences of foreclosure, this is only temporarily possible.

Eventually, when your first home does go into foreclosure, all your other records will be scrutinized. In any event that the feds or your lender peeks into your buy and bail attempts, you will have to face forgery lawsuits.

Better option

It’s better to just face the consequences and accept your foreclosure penalties. Lenders are generally more forgiving when they see that the foreclosure was caused by grave circumstances like job losses or deaths.

How “Cash for Keys” Works

“Cash for Keys” is usually the bank’s last resort when they’re having a hard time asking tenants and homeowners of foreclosed homes to move out.

Instead of resulting to violent and combative means of evicting the homeowners or tenants, they offer cash in exchange for the keys of the house, and certain conditions.

What are the usually conditions included in the “cash for keys” deal?

Foreclosed homes usually suffer from vandalism because of hostile homeowners or tenants who were forced to move out. To avoid such circumstances, banks offer “relief” in exchange for the keys and certain amicable conditions.

The “cash for keys” deal requires the tenants to agree not to vandalize the home. They are also not supposed to remove any light fixtures in the home that may reduce its value. Also, in exchange for the bank’s “relief”, tenants and/or homeowners will have to leave with the “foreclosure pets”.

Cash at stake

There is no fixed amount pegged on a “cash for keys” deal. As a homeowner or tenant, the most you can expect is stipend for movers, rental trucks, utility deposits, and funds for a temporary home, like a motel room.

You should not try to extort money from the bank because you might be facing a huge lawsuit upon doing so. Instead, when the “cash for keys” option is offered your way, be gracious and comply.