jeff6898 Posted April 25, 2007 Report Share Posted April 25, 2007 Due to being behind on my mortgage and unable to get refianced, I am being threatened with foreclosure. I found a company that has a investor that will by the property, pay off the mortgage and rent it back to me cheaper then I am paying now. He said I will actually be on the paper as owner as well and will have to buy the property back in 2 years. ANyone have any experiance with this? Is this a legit way to keep my home? Link to comment Share on other sites More sharing options...
momof5 Posted April 25, 2007 Report Share Posted April 25, 2007 I read about just this kind of thing today....in the news.....They use a quit claim deed and strip the equity and you end up evicted when they sell the house. Link to comment Share on other sites More sharing options...
firstsource Posted April 25, 2007 Report Share Posted April 25, 2007 Normally when an investor does this, you don't end up being an owner. Are you going to remain on the title? If so, how are they going to do this transaction? Please ask them for more details and post them for us.Charles Link to comment Share on other sites More sharing options...
jeff6898 Posted April 25, 2007 Author Report Share Posted April 25, 2007 I will do that. I have no idea how thye do it to be honest. Link to comment Share on other sites More sharing options...
jq26 Posted April 25, 2007 Report Share Posted April 25, 2007 I'm hearing about this from the other side. A close friend of mine is supposedly starting a business working with a well off investor that has 'private funding'. They are going to literally knock on the front door of the person that has entered foreclosure status and negotiate. The goal is to buy the home immediately at below market price. The private funding means it is available as early as next day which a bank cannot do. Then they "rent" the person back their house at a low rate. After 24 on-time consecutive monthly payments, the person can purchase their home back. One missed payment and deal is void. The upside is that the former owner can continue to live there, get financial together, and work on credit issues if need be. The downside is that they probably will not or cannot do these things (that is why they were in foreclosure anyway) and they may walk away from equity. But at least they don't have a foreclosure to preclude them from purchasing a home again. As the homeowner, it seems risky because of the transfer of title. I can't imagine how any investor goes at this without the deed unless they are going to rip you off the title anyway. BE VERY CAREFUL Link to comment Share on other sites More sharing options...
cracrap Posted April 25, 2007 Report Share Posted April 25, 2007 I read about just this kind of thing today....in the news.....They use a quit claim deed and strip the equity and you end up evicted when they sell the house.this isnt phrased quite correctly to make sense..if investor deeds title back to previous owner they cant sell the house out from underneath them,,what theyll probably do is structure the note in such a disfavorable way to the previous owner that they cant pay it off in 2 years whether its due to higher interest,prepay or principal (which will include the "stripped equity")if its done in an honest way it can be beneficial to both parties, the investor does,after all, need to make a profit on his investment..he has risk as wellunfortunately the deal is not normally structured to benefit both parties...whatever you do dont deed the title to someone else with your name still on the mortgage otherwise they can sell it out from underneath you Link to comment Share on other sites More sharing options...
momof5 Posted April 25, 2007 Report Share Posted April 25, 2007 jq....It is more that just a loss of equity. I am quite sure that when you get the opportunity to purchase your own home back, you will have to pay the investor the current market price. Essentially, you will most likely be priced right out of your own home.For example: I bought my home in 2003 for $138K. (I sold in in 2005 for $198K) Current zillow on my old house is $204K. So, if I had been in foreclosure (imagining I did not sell my house), then the investor would have bought my house for the value of the loan ($137K - I had rolled in fees to my orig mort....). I would have lost that equity to the lender. Then imagining a sorry increase of 1% a year for the next 2 years (JAX, FL is actually predicted to LOSE value this year and next, but that is another story)....Then I would have to purchase my house at $208K....and come up with closing costs, down payment, etc.If I had trouble paying the mortage on a house that I paid $138K on, how would I afford a $208K house later? I wouldn't unless I had a serious increase in pay. Link to comment Share on other sites More sharing options...
momof5 Posted April 25, 2007 Report Share Posted April 25, 2007 this isnt phrased quite correctly to make sense..if investor deeds title back to previous owner they cant sell the house out from underneath them,,what theyll probably do is structure the note in such a disfavorable way to the previous owner that they cant pay it off in 2 years whether its due to higher interest,prepay or principal (which will include the "stripped equity")if its done in an honest way it can be beneficial to both parties, the investor does,after all, need to make a profit on his investment..he has risk as wellunfortunately the deal is not normally structured to benefit both parties...whatever you do dont deed the title to someone else with your name still on the mortgage otherwise they can sell it out from underneath youThat is contingent on the assumption that the house is deeded back to the orig owner. The stories *I* read were that the investor had the owner fill out a quit claim deed. The investor became owner. Later the investor sold the house and then evicted the orig owner.There are probably honest investors out there, but beware! You might be a victim if you aren't careful. That is what I was trying to say. Link to comment Share on other sites More sharing options...
jeff6898 Posted April 25, 2007 Author Report Share Posted April 25, 2007 Thanks for all the replies, guess what I will do is when he shows me papers I will take them to a real estate attorney and have them look it over. Link to comment Share on other sites More sharing options...
momof5 Posted April 25, 2007 Report Share Posted April 25, 2007 Wise decision. Link to comment Share on other sites More sharing options...
someonesomewhere Posted April 25, 2007 Report Share Posted April 25, 2007 jeff6898,My natural suspicions are heightened. No investor is going to buy a home with no intention of turning a profit. Either you're going to get pricejacked when you buy it back, rentjacked, or otherwise jacked.No way for you to borrow against 401K, hardship withdrawal from IRA, or any other means where you keep your home? Link to comment Share on other sites More sharing options...
drhook Posted April 25, 2007 Report Share Posted April 25, 2007 . Link to comment Share on other sites More sharing options...
jq26 Posted April 25, 2007 Report Share Posted April 25, 2007 It is more that just a loss of equity. I am quite sure that when you get the opportunity to purchase your own home back, you will have to pay the investor the current market price. Essentially, you will most likely be priced right out of your own home......If I had trouble paying the mortage on a house that I paid $138K on, how would I afford a $208K house later? I wouldn't unless I had a serious increase in pay.Not necessarily. The terms can be negotiated upfront. Besides, if you have that much equity, then you probably have better alternatives anyway. In any case, I don't recommend it. Link to comment Share on other sites More sharing options...
jeff6898 Posted May 1, 2007 Author Report Share Posted May 1, 2007 I sure haven't found a better solution. For some reason the guy said the investor wants to wait until a actual foreclosure date before he does it. Can't figure out the reason. Pay off will; just increase then with the fees. Link to comment Share on other sites More sharing options...
jq26 Posted May 2, 2007 Report Share Posted May 2, 2007 Are you able to sell the home? Link to comment Share on other sites More sharing options...
jeff6898 Posted May 2, 2007 Author Report Share Posted May 2, 2007 I am not sure, the market here has took a huge nose dive. Link to comment Share on other sites More sharing options...
deedee Posted May 2, 2007 Report Share Posted May 2, 2007 Thanks for all the replies, guess what I will do is when he shows me papers I will take them to a real estate attorney and have them look it over.What are your other options? Your in foreclosure right? If you dont win the lottery or inherit money quick and pay off the loan, you dont have much of a choice. Do whats wise for you. If this takes you off the hook, do it. Some mortgage companies want the payment in full once your in default, so you may not be able to "catch up" on payments and save the house. Sell it to the investor (but make him/her give you enough money to put down on another house later) like if your house is worth 200k, and you only owe 100k, he should be able to give you $10,000++ cash atleast. Rent an apartment, save your money, get your credit together and buy another house when you can. Just dont let this foreclosure go to court!!! If you let this foreclosure go thru, you'll never be able to buy another house for many many many years. If the investor isnt trying to make your bad situation BETTER, sell to someone else with better terms. THere are plenty of people who'd be happy to buy your house quick and it be a win win situation, all investors are not out to rape you. Link to comment Share on other sites More sharing options...
amortgageman Posted May 2, 2007 Report Share Posted May 2, 2007 Jeff,Can you be more specific about your situation?What type of loan do you have?How much is the home worth?How much do you owe?Can you afford the payments going forward?Any idea of your credit scores?The investor is looking for a "short sale." This is when the lender will be willing to negotiate to keep from having a foreclosure sale. With a short sale, the lender will weigh the options of either getting more money from the short sale, or getting more money from auction. Link to comment Share on other sites More sharing options...
jeff6898 Posted May 2, 2007 Author Report Share Posted May 2, 2007 Jeff,Can you be more specific about your situation? Got 90 days behind last year due to loss of employment, was out of work almost 3 months. Got new job, pays a lot less. got 2 moths caught up but took everything I had. now I am 90 days past due. . Tried to send in a payment but it was refused. THey said they want Feb, March, April payments plus late fees or they will acclerate forclosure process.What type of loan do you have? conventional 2 year ArmHow much is the home worth? $185,000 12/06 appraisalHow much do you owe? $148,000 counting late fees and pre-pay penaltyCan you afford the payments going forward? Yes I canAny idea of your credit scores? 495 515 514 will be lower once 90 day late hits. Probbaly not the smartest thing to do but thinking of another chapter 13 to keep homeThe investor is looking for a "short sale." This is when the lender will be willing to negotiate to keep from having a foreclosure sale. With a short sale, the lender will weigh the options of either getting more money from the short sale, or getting more money from auction Link to comment Share on other sites More sharing options...
jq26 Posted May 2, 2007 Report Share Posted May 2, 2007 Just a thought- but you have some equity in that house. Maybe look to sell the place quickly for below market at $175,000? After realtor fees, you'd have $165 net. Enough to pay the balance and then put $17k aside towards a new purchase later. I'm not sure a short sale comes into play because the value of the home is higher than the total balance owed. Is your 2/28 about to readjust? What to do then? You have some credit dings that may prevent a refi. Assuming you even qualified for a 13, the lender is not going to just wash away previous debt and will foreclose anyway.Have you spoken to the lender? Do they have programs for people like yourself who had trouble but are able to make payments? I think right now lenders may be willing to work with people more than they used to because they realize foreclosing on homes is a lose/lose situation in this market. Link to comment Share on other sites More sharing options...
amortgageman Posted May 5, 2007 Report Share Posted May 5, 2007 JQ......... You are good.With the loan being a 2/28 ARM, I do not think a Chapter 13 would solve your problem, because with an interest rate rise on the horizon (after two years) your problem may only worsen.Work with the lender, but it may be too late in the process now. You may still inquire to see if the lender has any "forebearance" programs available. If not, try to sell the home outright and recoup what you can with your equity buildup. Put it in the bank, and rebuild your credit and a safety nest egg (savings, in the event this would happen again), and buy again next year (as long as the foreclosure word does not appear in your credit report), or two years if it does.If the loan were FHA or VA, they have programs that will prevent losing the home, and let someone move forward.You may PM Firstsource, and see if there are still any programs that will refi at 80% with a low 500 credit score. Link to comment Share on other sites More sharing options...
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