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No proof needed for 'Cash for Keys' payout
Posted: Nov 3, 2011 6:14 PM by Liza Sullivan
Updated: Nov 4, 2011 8:17 AM
There are multiple updates to this story. Please click here to get the latest information.
Banks and lenders are paying off people living in foreclosed homes to get them out. Come to find out, those "tenants" don't have to show proof they even live at the property.
Instead of an eviction notice, lenders offer tenants of foreclosed homes cash to hand over the keys, and move out.
The program is called "Cash for Keys." And one young man is taking advantage.
Brian Der Garabedian, 20, has been living at a foreclosed home on Ginger Lane in Paso Robles. Even though he's been there for six weeks, and doesn't pay rent, he struck a deal with a San Luis Obispo broker and Bank of America, to vacate the property in exchange for 75 hundred dollars.
"Basically, I'm just -- per our move-out agreement -- getting a 'Cash for Keys' offer today after a bunch of hassle," said Der Garabedian.
But Real Estate attorney Krista Sabin, of Ogden & Fricks in San Luis Obispo, said it's a lot less of a hassle then eviction, which is why banks use the program so often.
"Lenders have an incentive to offer a Cash for Keys deal, because they want the property vacated as quickly as possible," she said.
She added that even though Der Garabedian isn't considered a bona fide tenant, the bank does not care.
"Then it becomes a 'he said, she said.' This person occupying can say 'hey look, I had a verbal lease agreement with the prior owner' and there's really no way to dispute that," Sabin said.
So Der Garabedian got his money, and the home on Ginger Lane now sits empty, ready to be sold.
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