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Posted by Michael on August 03, 2005 at 07:18:01:
In Reply to: Re: Foreclosure Bailout Loan Guidelines posted by Jim V on August 03, 2005 at 00:17:19:
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: Jim, You are correct, poor choice of Title on my part.. Reason for the hard money interest rate: That is how the company makes it's money for the 12 month period of time... They DONT add $10k to the price when transfered back but they do charge a hefty interest rate.. The interest the homeowner is charged constitutes the "Lease" part of the program.. You can also call it Rent... either way, in my opinion when dealing with LTV's at 80-85% it is a suitable alternative to being foreclosed on... Thanx for your question Jim, keep them coming.
: What you have outlined is a property transfer, NOT a foreclosure bailout loan.
: A bailout loan will leave the homeowner in possession, and ownership, of their property with a new loan that might have less than preferable terms, but ownership is still in their name.
: If the property is transferred(sold) to a new owner, there should be no need for hard money interest rates. Title is held by a presumably "A" credit entity, with the previous homeowner having only a lease allowing them to retain possession(as long as they make on-time lease payments).
: I'll admit I'm having some difficulty understanding how the loan, with the hard money interest rate, comes into play since the homeowner no longer owns the property.
: Am I misunderstanding what you've outlined, if so, could you please explain how the lease-holder is charged for interest on a loan?
: : Ok, some you asked for more information in regards to the guidelines of a bailout loan... This is a 12 month Lease and Buy back loan... A Lease and buy back is when a lender will enter into a contractual agreement with you to purchase the home for a 12 month period and then sell you the home back (At the same price) The Max. LTV for approval is 85% (Meaning you must have atleast 15% equity in the home).. There is an actual LTV formula but I will spare you the calculations.... Your credit score and employement history will be checked, however, they are not a factor on whether your loan is approved or not...The borrower must have the ability to pay the monthly payments... The interest rate is a hard money status (10-12%) However, the best thing about this bailout company is that they will write you a Neg-am (Negative ammorization) loan (It's kind of like an interest only) so that the homeowner can make the payments on time...After 12 months, and since the home is no longer in foreclosure,. Ownership will be transfered back to the homeowner at the same price it was bought... You do not need to put any money down when the home is transfered back into your name.. You will receive a "Gift of Equity" which constitutes the down payment.. (That's why you must have 15% equity or more in the home).. This company is NOT in the business of taking homes... They don't want your home, they just want the interest on the loan for a 12 month period....I hope that outlines the program enough, please feel free to email me with any questions you might have... Thank you
