Preforeclosure, Owner Wants To Stay, How To Structure?

Comments(7)

• 
  commercialking21st May, 2004

  I think the "normal" way to do this is to Lease/Option it back to them. But I gotta warn you I think most of those deals go south in the end. What has changed that they will be able to make the rent/mortgage payments in the future?
  
  Not that I think its a bad idea. I like the idea of helping the nice old couple.

• 
  Stockpro9922nd May, 2004

  The problem with lease optioning it back or selling it back to them with your profit involved is that many states classify this as a "usurious" loan and set aside the transaction and your out.
  YOu can rent to them or they can refinance and buy you out but... I wouldn't try and sell it back to them on contract.
  
  Just a thought...

• 
  WiForeclosures22nd May, 2004

  From a lenders standpoint you need to CALL THE BANK and tell them what you are doing. Tell them you are getting them a reverse mortgage and show them a letter from the lender showing that this reverse mortgage is taking place. I work in a foreclosure department, and i WILL cancel or reschedule a sheriff sale if the mortgagor shows a willingness to ge tthe property out of our bank and somewhere else. Do not make the mistake of NOT communicated to the foreclosure department of what you are doing. Ask to have the elderly couple enter into A FOREARANCE AGREEMENT, which might slow things down. Maybe a bankruptcy would slowthings down eith way, forbearance or bankruptcy these people need to be able to make payments to somedegree until the refi takes place.
  
  He only reason why I let a property go to sheriff sale is because nobody returned my calls, responded to my letters, answered the door when I knocked, or when I went in the property it had been abandoned. I would never let it go to sheriff sale if the peron was trying to refi out.
  
  Let the judge know handling the case too

• 
  dealfinder25th May, 2004

  My question is why you would want to keep the people in the property. If they are about to be foreclosed on, what makes you think they will pay you. Once thry are "your tenant" you will then experience the nightmare involved with eviction. All the foreclosure methods I was taught always tell you not to allow the owner to stay in the property. Not trying to be a naysayer, just some good food for thought

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  way_motivated25th May, 2004

  I wouldn't do it period...chances are quite good they won't pay you and then you'll be forced to foreclose...they tell their story to their anyone who will listen and come to the conclusion that you knew that would happen and you never intended to help them in the first place....you will now get sued, you will go to court and the judge will ask, "if they weren't making enough to pay the bank why did you think they would pay you?"....

• 
  hibby7625th May, 2004

  They will loose their home! Tell them you'll rent to them in a year and help them buy it back once their financial situation has changed (if in fact you would do that) but you're asking for LOTS of headaches by helping them stay in the home.

• 
  active_re_investor25th May, 2004

  Look, they are an elderly couple so little is likely to change in a year.
  
  The advice on the L/O is good. If you did an L/O it will look like a usury loan.
  
  If you rent it back to them can they really afford the monthly? Lets assume that they can and do so just fine for a couple of years.
  
  Then one gets sick. Will you evict when they stop paying the rent? If not why are you getting into the rental business?
  
  Harsh? Very. Unless you bank will stop the mortgage payments when the tenant stops paying the rent you better learn to be harsh.
  
  Now, they might qualify for assistance as a renter. You just need to make sure the place passes inspection if they sign up for a program and rent from you.
  
  John
  [addsig]