Real Estate Scam Of The Day: Cash For Keys
March 4th, 2011
We’ve all heard of squatters’ rights. In fact, at one point in our nation’s history, squatting on land was even encouraged. But now, they’re not just trying to take over properties; squatters want lenders to pay cold, hard cash. While this concept is not new and many landlords have opted to pay a small cash sum to tenants in exchange for a quit exit instead of undergoing a tedious eviction process, in southern California the squatters are asking for big bills, not small cash sums to help the move go more smoothly. For example, Gregory Russell, who is a convicted squatter, recently demanded $25,000 from Gateway Bank in exchange for moving out of a foreclosed Bel Air mansion and turning over the keys[1]. Gateway has a policy of paying squatters up to $5,000, but balked at $25,000.
Russell is the exception in that he has been convicted of misdemeanor trespass thanks to his squatting. Most squatters are not charged and prosecuted. Many squatters research lenders and properties extensively before moving in, finding out just how much they can ask for and what they can expect to get. Some lenders will actually negotiate with squatters for faster exit times and smoother transitions. They say that it can cost more than $100,000 and take over a year to go through a court process and eviction, even if the squatter had no right to be on the property in the first place.
Do you think that lenders should pay cash for keys? If they do, do they deserve this “bad behavior” from squatters?
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[1] http://www.nbcsandiego.com/the-scene/real-estate/LEGAL-SD-Cash-For-Keys-115983169.html
March 4th, 2011 at 9:51 AM
REJ:
Squatters have NO rights. Altogether too many “rights” are figments and/or rectal extractions. However, should a lender succomb to paying tribute to King Squatter, then they deserve to be fleeced.
Why do lenders, where deficiency judgements a legal, not exercise that right and pursue many of the deadbeats who were squirreling away their mortgage payment money when they found their property underwater and until the property was foreclosed upon?
Notice to landlords and lenders, I know this guy named Guido who…
JIMBO
March 4th, 2011 at 11:31 AM
First, the cash for keys program is not new, as stated in the article. But what is different this time, is the Banks started offerring the cash for keys when they had foreclosed on properties( especially rental properties) and people had nowhere to go because the Landlord kept telling them that “they would take care of it” or it was taken care of! Once that happened, then the scam artis started working the system, and we have the situation we have now. It is still cheaper for the banks to give cash for keys instead of going through the eviction process.
March 4th, 2011 at 12:26 PM
Let’s see if I break in to a home and then leave I am a burglar and if caught and convicted I go to jail. If I break into that same home and setup residence, I am merely a squatter and now I have rights to stay and demand payment before I will leave. Lady Justice is shaking her head!