Cash for keys is an offer from somebody that basically says that you are no longer the owner of the property, we can get an order of eviction, we can get the sheriff to throw you out, or you can accept $1,000 (or whatever the amount is in the offer) and get out on your own.
If you accept such a deal do not sign anything except a document that says you are acknowledging payment and that you will vacate the property. If the offer contains any language that looks like a release of other claims, do not sign it unless you have decided, after consulting local counsel, that you are willing to give up what might be very substantial claims against the lender which can always be brought after the sale.
Cash for keys is a good option if you are giving up anyway. And nobody can blame you from walking away from a fight that you don’t understand, that you can’t match the resources or power of your adversary, and where you don’t know what to do and have no knowledge of the outcome of fighting this. Being out of money doesn’t help either.
So whatever decision you make is understandable and RIGHT FOR YOU because you made it. There is no right and wrong here except that what the lenders did here in conspiracy with Wall Street was clearly wrong.
ALL THAT SAID —- MY SUGGESTION IS THAT YOU FIGHT ON AND HAVE AN EMERGENCY PLAN B READY IF YOU NEED IT. AND CONSULT WITH COMPETENT COUNSEL BECAUSE THIS IS GENERAL INFORMATION AND NOT LEGAL ADVICE IN YOUR PARTICULAR CASE.
If you delay the eviction through bankruptcy (you can get one of those do it yourself kits) you should probably send a letter registered mail return receipt requested to the lender and file a Chapter 13, along with an adversary proceeding which says basically that the lender committed many violations of the Federal Truth in Lending Act (TILA), that you are entitled to an accounting for all interest paid, all points paid, and a refund of all out-of pocket expenses associated with finance charges or the costs of closing on the loan, and that you hereby rescind the transaction.
Under TILA (see my recent BLOG posts) this eliminates both the security interest and the debt.
You must allege that the lender procured title through trickery and fraud, that they have no security interest, that they have no entitlement to payment, and that they are NOT the owner of the actual security instrument nor the debt which has been sold as a collateralized mortgage obligation to a third party investor who has never been joined in the prior proceedings; thus they failed to join an indispensable party which means that the prior procedures which resulted in transfer of title were not only procured by trickery, fraud on the court, and overreaching, they did so without properly or legally invoking the jurisdiction of the local government that authorizes judicial and non-judicial sale.
Thus the taking of the title was an unconsitutional denial of due process, void ab initio (at inception) and therefore unenforceable by any court.
Hence when they (the lenders) move for relief from stay, you can point to their lack of standing because they did not legally or properly obtain title and you have rescinded (attach copy of your letter) so they don’t have the option of clearing it up.
Now here is the kicker.
Under TILA, when you are NOT REPRESENTED By COUNSEL the Judge, especially if it is in Federal Court (which is the case in all bankruptcies) MUST in essence act as your lawyer and review the facts, the allegations, the case law and the circumstances to determine if there is ANY basis to support the relief you are asking for or to deny the relief the lender is asking for.
In other words you are better off not having a lawyer than having one who barely knows what he or she is doing. The bankruptcy judges are almost universally well-schooled in the law and very sharp. You couldn’t have a better lawyer! Of course if you DO know a very competent attorney who is familiar with these concepts, then you are better off going with the lawyer than without one.