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ErikOk

Foreclosure and Tenant Buyer

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How much time usually passes from the point a tenant-buyer has a foreclosure until they could qualify for another loan? I have a 2 year lease purchase and the tenant-buyers had a foreclosure 1 year ago. So within the 2 year lease should the be OK with qualifying for some type of loan?

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There are variables that will affect their ability to qualify for a new mortgage. But with one year behind them and a two year deal, that pushes the foreclosure three years into their rear view mirror, which should be more than enough. Again, depending upon the total picture.

The smart thing would be for the t/b's to speak with some mortgage people to get the lay of the land.

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I have 2 people in Indiana who are in pre-foreclosure and are interested in the lease option strategy.

 

Now in 2013 is it a good idea to pursue pre-foreclosures using a lease option strategy? I have been speaking with a person who works for a title company and the idea of having the mortgage payments sent directly to the leander avoids the possibility of the owner using the money for other things. I also want to make money on the deal and help the homeowner too! Has anyone done l/o this year with a pre-foreclosure homeowner? Does the bank need to be informed of this strategy? What are the pros and cons? Thanks

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I think we are talking 2 different sides here...

1) for the T/B....lenders require 3 years from the date of the FC....I don't give a crap about what else you hear....such as 2 years....it ain't gonna happen.

3 years...... now, we have someone that is at the 3.5 year mark, went to take them to finance....turns out the bank held the house for 13 months before they put it on the block!! Now we have to wait till October!!!

Grrr......

 

2) I don't like doing LO's on a house that is 90 days or more behind. You can, but the buyer better have enough to pay you, and make up the arrears.

Also Charles....I saw a response to a question you had on a "less friendly forum"....

By a guy that is trying HARD to push his LO training...

Due on Sale DOES apply to a lease option.

REad any deed of trust and there you go...

I only read a couple hundred a month......but...

Nothing to worry about at all.....but due on sale applies to any transfer of ownership, sale, or lease option etc.

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Charles, in addition to what John wrote, let me just add that I avoid doing deals with any homeowner who is behind on the mortgage. That note needs to be brought current first, and where is the money going to come from? Obviously the homeowner doesn't have it or he wouldn't be behind in the first place. If the option money you receive is then used to make things good, what's left for you in the deal?

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