Home Buying in Seattle>Question Details

Sparky, Home Buyer in Seattle, WA

Looking for a investor to buy my home to prevent forclosure and stay in my home. we qulify for a loan modification but our Litton Loans said NO

Asked by Sparky, Seattle, WA Mon Jun 21, 2010

Help the community by answering this question:



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.
2 votes Thank Flag Link Mon Jun 21, 2010
What you are talking about sounds a lot like a distressed property home conveyance which is a very risky situation for you. Here is a link if you want to learn more about it. Some homeowners had their equity basically stolen in this fashion, so the Washington Legislature wrote a new law to help prevent that from happening. http://apps.leg.wa.gov/rcw/default.aspx?cite=61.34&full=true

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.

Good luck!
1 vote Thank Flag Link Mon Jun 21, 2010
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.
1 vote Thank Flag Link Mon Jun 21, 2010
That would be possible if you are willing to rent at above the monthly mortgage payment would be for the new owner. But, then you would just be a tenant. Why not do a short sale, rent the same house or another for a while, then buy a new house that you qualify for. Please give me a call if you would like to have a no obligation consultation with me. I work with investors and short sales as well and would be happy to help you figure out what you want to do. 206-841-9976
1 vote Thank Flag Link Mon Jun 21, 2010
Have you tried contacting a local short sale specialist. Often they have the ability to work with someone at your bank with you? There are a couple of large investor groups in the area although I personally hear from investors prior to the sale.
0 votes Thank Flag Link Thu Jul 1, 2010
A few people have alluded to the short sale question. If your home is no longer worth what you owe and you would be selling short to an investor, it is quite likely the bank or Litton Loan Servicing will require you and your buyer to sign a document expressly forbidding the kind of arrangement you mention. Believe it or not, this rule was implemented to prevent unethical investors (scammers) from equity scimming unsuspecting home owners and/or to prevent the 2 parties from colluding against the bank.

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!!
0 votes Thank Flag Link Tue Jun 22, 2010
What are you willing to give up (equity, cash-flow, etc) in exchange for this assistance?
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.
0 votes Thank Flag Link Tue Jun 22, 2010
Before you jump into a short sale, I think it'd be best to speak with an attorney that negotiates them so you know all the legal aspects of what it would mean to you. We, as agents cannot offer you legal advice. Every short sale I do, my clients have access to an attorney that I now have negotiating them. I used to negotiate my own short sales but since I can't give legal advice, I have opted to have an attorney that is free of charge to the seller handle the negotiation. Most of the time they get the bank to cover their expenses & if not, I cover the fees. If they are unsuccessful, they get nothing.

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.
0 votes Thank Flag Link Mon Jun 21, 2010
Sparky, Do you have 1 loan or 2? Have you met with or apoken to a real estate agent? It is difficult to give you complete information with such limited details. With more information I can help answer any questions you have. Feel free to contact me anyitme.
0 votes Thank Flag Link Mon Jun 21, 2010
Sparky, You certainly got a lot of helpful suggestions from everybody. But, as you can see, most of them steer you to a short sale because that is the cleanest action you can take when you are upside down in your mortgage & can't make the payments easily. You should contact at least one of us and have a conversation so you can give us more detail and we can help move you in the right direction. We are all just shooting in the dark when we have just partial information. I hope to hear from you soon.
Web Reference: http://Metromgi.com
0 votes Thank Flag Link Mon Jun 21, 2010
Sparky if you have lost at least 20% in equity and are in default, we can possibly help send me an email with your contact information.

Other requirements are housing/income(only) ratio no greater than 40% and you must be employed.
0 votes Thank Flag Link Mon Jun 21, 2010
Sparky what you want to do probabily will not end well, there ar enot alot of investors that will risk their money. you may get alot of people looking for you to sign over your deed which will lead to more financial worries for you.

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
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Jun 21, 2010
Congratulations Sparky for being creative and looking for a way to stay in your home by asking for help and going around a lender who will not help you accomplish that! Too many lenders are not adjusting their lending models to help the unemployed, underemployed or those that have had an illness, death or divorce in their lives. My husband and I used to try to help homeowners but now are having challenges ourselves in this slow housing market. I wish you the best. I encourage other investors, neighbors and families to help each other out. If we can have outrage and empathy for victims of natural disasters and oil spills, we should surely be able to help those whose incomes have been curtailed.
Good luck.
0 votes Thank Flag Link Mon Jun 21, 2010
Have you considered a short sale? it would put your house on MLS and get you the highest and most appropriate market bid for the house. Also, with short sales, lenders want to see that house has been on the market for x amount of days before they approve a short sale.

I have done many successful short sales and would be more then happy to answer any questions you have.

Web Reference: http://www.verabrodsky.com
0 votes Thank Flag Link Mon Jun 21, 2010
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