This may be an option for you. I know that a short sale can not be sold to friends or family.
You may also want to see if you can assume the current mortgage for them. This basically means you buy the house for what's left on the mortgage, and you become responsible for the payments.
I think your best bet is to have a meeting with your family member and the bank to discuss options. I'm sure they will work with you.
A little tough love toward them would be to let them fall into foreclosure to underscore the dangers of home ownership and let them take better steps to manage their finances: buying within your means, building reserve savings for emergencies, and knowing how to care for their own family.
What is the house worth today?
What is owed on it?
subtract question 2 from answer 1 and maybe buying at the pay off would be financial suicide for you.
Q3 2009 U.S. Foreclosure Heat Map (YIKES!!)
Depending on where it is in Georgia this could be buying into a market that will drop a lot more. Be careful.
Below is a real estate market forecast for 2010. Look at the area they are in.
Helping out a friend is a wonderful thing. But damaging yourself extensively in the process is not worth it. You need to find out the numbers and reasons that put them in this position and could place you in a similar one later on.
Wonderful act of kindness on your part. Though not enough information. Are you planning to buy the home outright with cash or take out a mortgage, is your family member behind on payments, has the foreclosure process started, have you contacted your accountant or lawyer to find out the effect on you and your finances, etc., etc.
Great speculative advice so far. Hank, Lynn, and John bring up great points. If you do decide to go this route and purchase the home outright you may want to consider a lease purchase with guidlines set out in the contractual agreement to protect your investment and provide a vested interest in the home for your family member.
Suggestion are they approved for a short sale by lender?
Some lenders may prevent other family member purchase a home
All transactions would need be in contractual form submit lender for you purchase, goes thru title transfer property in your name .
Are your approved for a loan? If no then you need complete all requirements for mortgage contact a loan officer where home is located. Insurance, tax could be higher you would not be primary resident for home however confer CPA for annual tax benefits.
Can your family member afford making payments back to you? Have income, can you break even. In some instances for repairs and etc. family member can become demanding you pay fix the home keep it up while they reside there.
I would have a contract between you family member if you need evict them "tough love" sounds harsh many times these kind jestures become nightmares you are stuck holding property. If they move due to employment you know have a vacant home with mortgage, tax, insurance, realtors fees sell property.
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If you want to help them why not just "loan" them the amount they are behind to bring it current. If you wanted the money back you could attach a Trust Deed to the house so if they don't eventually lose it to foreclosure and decide to sell it you'll at least get your money back.
That's a tough situation but buying it to save them does not sound like a good idea.