First up: Apologies for the long response in advance.
The ONLY answer that hits the nail on the head on your actual question is from Charles below.
The Distressed Homeowner Law effectively stopped (ethical) real estate investors doing this kind of business. There are many who believe that this kind of business is not ethical - period. Your call for help shows that there *are* many situations out there where "lease-backs-with-option" (as they are known ) are a valuable tool for a distressed home owner.
So if you would like to buy the home back in the future, then there are few professional investors who will help because the profit on such a transaction was limited to 18% total profit (and if you have a three year agreement, that means 6% per year) which is not much better than a good term deposit.
Do not rely upon verbal promises from anyone that you can buy back the home later. Regardless of their intent today, their situation may change tomorrow and you may be out of luck.
If you do not intend to buy it back (i.e. rent only) then your options are a lot more open and investors may do a short sale. However, I know that Litton requires that the home be on the market in order for a short sale to proceed, so there will be some delay and you'll still need to get an agent involved.
But while many investors may buy the home and rent you a house somewhere else, the ones that will rent you *that* home are fewer.
See this article by a well known eduator on the topic written back in 2004 when this kind of transaction was easy to do not controlled by the legislature: http://www.memberize.com/clubportal/clubdocdisplay.cfm?clubI
In all of the above, there are many risks that the investor needs to consider. Risk of a future lower value on the home. Risk that you are not happy with the transaction after the fact and sue. Risk of the TREBLE damages that can be levied by a court should they be prosecuted under the law Charles quotes below.
My advice if Litton won't do a loan modification and if family can't help: Sell the home as a short sale. Find something nice to live in and move on. The bank will be working to their best *financial* advantage. You should, too.
I hope that helps.
A short sale may be a solution for you, but the bank would have to agree to it. However, with a short sale you will not be able to stay in your home. Also, in some instances a short sale may not totally relieve you of the debt that you owe. A loan modification is your best bet to stay in the home so I would exhaust that possibility as far as you can take it. There are a lot of factors involved of course, how long have you owned the home? how much do you owe? how much is the market value of the home now? I would be happy to try to steer you in the right direction if you would like some assistance. Just email me at CharlesMedina@Cbbain.com.
You have several choices; loan modification, short sale, deed in lieu, or foreclosure. If your lender will not participate with a loan modification, ask if they will consider a short sale. Generally speaking this is the least damaging of the remaining options. If they are open to this, find an agent with current meaningful experience doing short sales. There are many newly certified Distressed Property Experts who sat through a class but have never done one. There are also agents who did them in the past, but not recently. You want recent, successful experience.
Deed in lieu of foreclosure is a peaceful transfer of ownership to the bank. Foreclosure is generally the least desirable. Both Deed in Lieu and Foreclosure will have the greatest impact on your credit.
You need to talk to someone who can go over all the ramifications in greater detail than any of us can in a forum like this. Feel free to contact one of the responding agents who may be able to help. I wish you the best.
If you are not selling short, get the house listed on the open market ASAP and direct all marketing efforts to the investor buyer. In this case it is "seller beware". If you agree to any sale that would have you retain possession of the house but not title, with the possibility of buying back your home, make sure you are 100% crystal clear on what you are signing, your obligations, and rights.
Good Luck to you!!
What's this investor's guaranty that you won't also default on this loan?
Please explain your statement on qualifying for a loan mod: either you qualified for one or you didn't.
How much time do you have? This is also crucial. Again, without knowing the specifics it's hard to properly present your options. Don't shoot me fellow agents, but there are times when foreclosure is the best option for people. It all depends on what your individual scenario is. If you could find someone who would buy your home as an investment & have you as a tenant that would be great, but in order for it to make sense to an investor you'd probably have to make a very similar payment to the one you are not able to make right now.
You need to go back to the loan modification again, but this time have a professional assist you. There is a newer non profit agency that assists home buyers like you at no costs. Hopfully someone has the web address and can post it for you, it was the h.o.m.e. plan but i cant find it when i google it. They will work with your bank on your behalf to compelte a loan mod if if they turned you down in the past. look out for scammers. if i find it ill come back and post it
I have done many successful short sales and would be more then happy to answer any questions you have.