My New Blog

What is it about misfortune that brings all the schemers and crooks out of the woodwork? You are already behind in your payments on your home and along comes a person with a great idea to save you. Beware the night in shining armor or the mess they will get you in may be worse than the one you already are in.

There are 2 scenarios making the rounds of short sales right now, praying upon those that are desperate for help.

In the first one, you will be contacted by someone who will make up your back payments, make up your back taxes and insurance, and may even have a little something for you. That's called the hook. The trick? They can't actually finish the purchase of your home for about 2 years because of (you fill in the blank), but if you will sign the home over to them they will make the payments till they close and you will come out smelling like a rose. So, how does it work? They find someone who is desperate for a home, that will pay upfront cash for a lease/purchase opportunity, with the idea that if they can purchase this home in 2 years once they get their credit re-established. So, lets work numbers on this. These people agree to take over your home for your balance of, for example, $150,000 and agree to make your payments of $1200/month. They find someone who will pay $ 175,000 for your home and because their credit is bad they will pay $1600/month rent. The scammer will then negotiate a deal with your lender for $125,000 on the house and the rest is potential profit, Sweet deal for the investor, yes? How might it work? The investor can't get the bank to take less, the renter with bad credit repaints your home blue and their dogs tear up your carpet and they fall behind in their rent, the investor can't make your loan payments because the tenant is not paying rent, the bank comes looking for you since you are on the loan, you can't get in touch with the investor, but it doesn't matter since you signed the home over to the investor anyway and you no longer own the home even though you are still liable for the payments.

Sound like something you are interested in being involved in? Ask my client, LT. Jeff, in the Navy in California, who almost lost his home this way and he was transferred to California and couldn't even be in Ohio to watch this happen. I saved him, but it took months and he had to pay all the back payments and fix the home. It cost him thousands, and almost his career, because Naval officers can't have bad credit if they want to be naval officers.

Listen, if you are behind in your payments, call your lender and work it out with them. Step 1 is to ask for help. If they can't help you, sell the home and clean your slate and start the long road to rebuilding your life. You can do it, just make sure you get real help from someone looking out for you, not for them. Watch out for something that sounds too good to be true, it normally is.

Stay tuned for part 2.