starbaze1 0 Report post Posted October 24, 2006 A Lady I met needs money fast. She's behind in her mortgage. Also needs money to pay an attorney for some personal matters. Her credit is not good, so its difficult and costly to go the equity route. My credit is excellent. So she wants to surrogate the house to me,. the title would be in my name as well as the loan. But she wants to remain owner. This way she doesn't have to move, just make my mortgage payments for one year to clear up her credit and then, she'll either buy the house back or sell it to a 3rd party. She'll give me $20,000 upfront for doing this. here are the terms so far: Surrogate Contract 10/16/2006 This is a contract between Terry Atlas (seller) herein call Terry and Ronald Braksdale (buyer) herein call Ron. 1. Sales Prices 450,0002. Ron (surrogate) to get 20,000 at closing 3. Terry is to pay all monthly payment4. Terry is to get all tax write off5. Terry is to set aside 6,500 in case of emergence and unable to make payments6. The account is TBD in escrow.7. Terry is to buy the property back in one year, or sale the property to a third party8. Seller to pay all closing cost 9. Tim Turner is to be paid a 2% broker fee10. Terry is responsible for all rehab work. 11. When the property sales all net proceeds is to go to Terry Atlas12. In the Event Terry get behind on payments Ron has the right to sale the property Immediately and collect all back payments and collect all net proceed. Does this look like a good deal, or are there other considerations I should ask about?I'd love your advice and comments,Ron Share this post Link to post Share on other sites
Brian - L.V. 0 Report post Posted October 25, 2006 Wow. Honestly it seems to me that she wants you to take on a lot of risk for what I can see is not a lot if any real reward. I don't know if the selling price of $450k is a steal or not since I don't know your market or those details, but my initial thoughts are this: -Why not just take the $20k and bring the payments current? -Where is this $6500 emergency fund going to come from?-The payments are behind, so if you take over the house/loan how will the loan be brought current so the bank doesn't forclose on YOU?-If she's behind on the payments right now, why do you think she'll be able to make them to you (remember your name would be on the loan)? -Why should she remain the owner if you have all of the responsibility?-Why do the net procedes from the sale go the seller!? I'd keep going, but having a stroke at age 26 isn't really what I need right now. Maybe more specific details about the house (comps, etc) are needed because the more I go back and read the details, the more my head hurts. For your sake, I really hope I'm missing something...... Share this post Link to post Share on other sites
starbaze1 0 Report post Posted October 25, 2006 Wow. Honestly it seems to me that she wants you to take on a lot of risk for what I can see is not a lot if any real reward. I don't know if the selling price of $450k is a steal or not since I don't know your market or those details, but my initial thoughts are this: -Why not just take the $20k and bring the payments current? -Where is this $6500 emergency fund going to come from?-The payments are behind, so if you take over the house/loan how will the loan be brought current so the bank doesn't forclose on YOU?-If she's behind on the payments right now, why do you think she'll be able to make them to you (remember your name would be on the loan)? -Why should she remain the owner if you have all of the responsibility?-Why do the net procedes from the sale go the seller!? I'd keep going, but having a stroke at age 26 isn't really what I need right now. Maybe more specific details about the house (comps, etc) are needed because the more I go back and read the details, the more my head hurts. For your sake, I really hope I'm missing something...... Share this post Link to post Share on other sites
MichaelC 160 Report post Posted October 25, 2006 Ron, Brian is right on with this. When I look at the risk to reward ratio from your position, I don't like what I see. Too many things can go wrong with this deal. And the likelihood of this woman living up to her end of the deal is minimal. Not that she has bad intentions, mind you. But her track record leaves much to be desired apparently: behind on her mortgage, owes an attorney money, bad credit history, etc. Assuming you really want this property, a better solution in my opinion would be to take over the property Subject To, and then set it up as a Rent to Own with Terry. If all goes as planned she could exercise her option and buy the house back in a year. Share this post Link to post Share on other sites
Rich_in_CT 0 Report post Posted March 12, 2007 If she owes an atty money she may have had or still has legal problems that could cause you headaches. Share this post Link to post Share on other sites
stshort 0 Report post Posted July 9, 2007 Attorneys love to lien properties for their fees. If you bought this property from her "foreclosure bailout" lender watch this very carefully.Terry needs to consult her tax adviser for the ability to write off interest on a property she no longer owns or is recognized by the lender as owner. (interest write-off is in the name of the borrower) You too need to seek legal advise on this topic. depending on your state there might be several laws governing this type of transaction. (many articles about unethical people taking homes from people this way) It sounds better for you to buy it from her and place her in a lease option. or possible a Land Trust. just a thought Share this post Link to post Share on other sites
jamesh43 0 Report post Posted December 31, 2007 A Lady I met needs money fast. She's behind in her mortgage. Also needs money to pay an attorney for some personal matters. Her credit is not good, so its difficult and costly to go the equity route. My credit is excellent. So she wants to surrogate the house to me,. the title would be in my name as well as the loan. But she wants to remain owner. This way she doesn't have to move, just make my mortgage payments for one year to clear up her credit and then, she'll either buy the house back or sell it to a 3rd party. She'll give me $20,000 upfront for doing this. here are the terms so far: Surrogate Contract 10/16/2006 This is a contract between Terry Atlas (seller) herein call Terry and Ronald Braksdale (buyer) herein call Ron. 1. Sales Prices 450,0002. Ron (surrogate) to get 20,000 at closing 3. Terry is to pay all monthly payment4. Terry is to get all tax write off5. Terry is to set aside 6,500 in case of emergence and unable to make payments6. The account is TBD in escrow.7. Terry is to buy the property back in one year, or sale the property to a third party8. Seller to pay all closing cost 9. Tim Turner is to be paid a 2% broker fee10. Terry is responsible for all rehab work. 11. When the property sales all net proceeds is to go to Terry Atlas12. In the Event Terry get behind on payments Ron has the right to sale the property Immediately and collect all back payments and collect all net proceed. Does this look like a good deal, or are there other considerations I should ask about?I'd love your advice and comments,Ron Ron, it appears as if the seller is attempting to do a sale-lease back. As far as the sales price, find out how much she owes on her mortgage. Add in your fee for doing this for her. Do not put her on the title, this could be seen as mortgage fraud, and you could spend some time in jail. She may not have even thought about it. Have her sign a lease option agreement for 12-18 months to help her get her credit back on track. Tell her that you want to escrow 12-18 months of payments, in case she falls behind again or if she decides to walk away from the property. Remember, she needs you more than you need her. If you're satified with the 20k; then go for it. Make sure you are covered in case of worst happens. Thare are many people with excelant credit like you who make literally 100k or more per year just selling thier credit. Might be an avenue to consider. Share this post Link to post Share on other sites