All Forum Posts by: Stephanie Medellin

You only need to repair chipping paint, of course!  No missing flooring, no leaking roofs, no broken window panes.  Anything currently on the property should work properly.  The appraiser will walk through and check for hot running water, proper drainage, turn on the heater, verify there are smoke and CO2 detectors, make sure there is no peeling paint, etc.  It's not a complete home inspection, but if they notice anything is not working properly it will probably end up on the report.  The sellers will have to agree to have it fixed, and then the appraiser can come back out and verify the repairs have been completed and that the property now meets the required standards.  Anything can be fixed for a cost, so it doesn't necessarily have to kill the deal, it will just be a condition of approving the loan.

@Sue Kelly - I like your wording: Does anyone in the household anticipate a reduction in earnings during the lease?

Simple and to the point, and it avoids any potential discrimination issues.

It sounds like a counter offer if they changed some of the terms you offered on the contract.  If they accepted your offer, shouldn't they have signed it as originally submitted?

Don't waste money putting expensive finishes in the home!

This is from a California standard Fannie Mae / Freddie Mac Deed of Trust:

6. Occupancy. Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating circumstances exist which are beyond Borrower's control.

I'm not sure what they use in Texas, but I imagine your loan documents would have a similar clause.  With a question like this, it's always best to review your own documents to verify rather than relying on an article, and it should be fairly easy to find.

It looks like the live auctions, at least in California, are trustee sales. The online sales are REO properties already foreclosed and owned by the lender. Trustee sales could have title issues, tenants or occupants still in the property, and you won't be able to inspect the property before auction.

I bought a house through a live auction.com auction back when it was called REDC, but they were all REOs at that auction.  I got an amazing deal and it was a pretty seamless process, although back then clear title was guaranteed, and the home was vacant, so there was much less risk.  I think the terms have changed quite a bit since then, and I would definitely recommend reading the contracts online so you fully understand what you're getting into before bidding. 

For #1 - Gotcha - I overlooked that point that he already had the money.

I would be really interested in hearing about any conditions asked for on a loan like this.  It seems like there would be some, but maybe not...

It sounds like a legitimate creative financing option.

I was going to suggest refinancing with a HARP loan, since equity is not an issue with HARP, but without sufficient income to qualify for the loan this wouldn't really be an option unless you could find someone willing to go on the loan with you.  Is your property value even close to what you owe?  If it is, it may be worth it to refinance (assuming someone could help you qualify).  If you're still 100K or so off, it may be worth thinking about a short sale.  If you're breaking even with rental income and have a steady, reliable tenant, I would probably wait it out to see how much more property values increase. 

Oh no!!  That's not very helpful!  Sadly, not entirely surprising though.  Do you have time to go in person to the office?  Or maybe you could try calling back and hopefully you get someone else? 

You definitely pose an interesting point.  I was looking at the guidelines for this not too long ago, and I can't really find anything that would indicate that it couldn't be done.  The guidelines I see address when cash is taken out, but not when zero cash is taken out. 

Not sure if this was a typo, but Joe wouldn't be walking away with $402k, it would just go directly to pay off his loan from Frank, so I don't see Joe benefitting from this transaction.

The only thing I can think of at the moment is that the new borrower might have to be treated as a non-owner occupant since their address will be elsewhere, and they are just refinancing.  Because they are not "purchasing" the home with a sales contract, there is nothing indicating they will be moving into the home. 

Also, I think the lender would still want a grant deed to be used instead of a quitclaim.

It would probably be a great option if the "seller" or borrower who wants off title and off the loan does not expect any profits, but how often would this really happen in an arms length transaction.  The "seller" wouldn't want to just give up $150k in equity to a stranger.