Home Buying in Salinas>Question Details

Mushyfrombong, Home Buyer in Salinas, CA

A person is about to be forclosed and wants me to buy the house and he will provide the d.p. and cl.costs and make monthly pmt w/taxes, ins and mort?

Asked by Mushyfrombong, Salinas, CA Sat Nov 26, 2011

He plans to buy back his house from me in 2 years when his credit is good. Legal or not?

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If you are contemplating the purchase of a short sale house under the circumstances that you describe you may later be accused of perpetrating a fraud against the lender. Does that sound like a good idea to you?
2 votes Thank Flag Link Sat Nov 26, 2011
Mushyfrombong,
Why would you put your credit at risk with someone who has already wrecked theirs? Forget about legal or not, it's not smart. If they fail to keep up with the bargain your credit is toast. If they don't pay their taxes, you are responsible. If someone is injured on the property you may get sued.
What part of this is good for you? It's great to be nice, but chances are this would blow up in your face and leave you stuck evicting them and trying to clean up a mess.
I just closed a short sale for someone who used their credit with some "investors" on a flip project. They were totally burned and their once perfect credit will be messed up for years. Please, legal or not, don't do this.
1 vote Thank Flag Link Sat Nov 26, 2011
That is not allowed by the banks. As to the legality, you will have to speak with a qualified attorney.
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1 vote Thank Flag Link Sat Nov 26, 2011
There are many options a distressed property owner has for resolving their problem. It is unknown what has been pursued to this date. The process is something I like to refer to as choosing the 'Least worst' option.

Your scenario can be labeled from your perspective as the 'worst worst' option. You will do what ever you want but the consequences of pursuing this are quite easily known. There will be no place for you to hide.
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0 votes Thank Flag Link Sun Nov 27, 2011
And making the Transfer of money from former owner to you for Down Payment and Closing Costs would not be "picked up" by the Bank that is financing the Loan?? PLEASE!!
0 votes Thank Flag Link Sat Nov 26, 2011
This may be perfectly legal , the bank could care less if they re buy the home 2 years from now and they pay rent untill , lay out the scenario to the loss mit dept and if you dont get no where with them go directly to the investor that is holding the note.

I would have them list the property at the market price and you make the offer to the bank through the listing realtor , if your offer is below the mortgage amount the bank may not accept it anyway . If it is a shortsale the fact that the current owner " offered " you the home does not make it a crime.

You would have to disclose on the HUD the seller paid closing cost , the DP cannot come from the current owner , the monthly payments are just rent payments
0 votes Thank Flag Link Sat Nov 26, 2011
What do YOU want, MFB? Do you want to bail this person out and trust them to keep their payments current with you when they couldn't keep them current before?
0 votes Thank Flag Link Sat Nov 26, 2011
I believe bank fraud is a federal crime. There is a requirement in a short sale that all parties sign an affidavit stating this is an arm's length transaction. To falsify that would be to also perjure yourself. So, please do not get involved in this scheme.
Maureen Mason
Realtor
0 votes Thank Flag Link Sat Nov 26, 2011
Dan and Margaret are correct, it may not be legal, but it really isn't smart.
If this person is a relative, then it is definitely ILLEGAL.

There are sooooo many things that can go wrong with this:
And if they have all this money, why don't they just negotiate to save the house.

There are Red Flags all over the place.

Good luck and may God bless
0 votes Thank Flag Link Sat Nov 26, 2011
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