Forced into bankruptcy but need house NOW! - Posted by Dawn Johnson

Posted by michaela on July 17, 2002 at 08:25:49:

i forgot to mention, that you can find the closest rei club by looking on this website on the left, scroll down to ‘resources’ and click on ‘local rei clubs’

Forced into bankruptcy but need house NOW! - Posted by Dawn Johnson

Posted by Dawn Johnson on July 16, 2002 at 22:00:35:

I found this site while searching for lease option properties. If any of you have any advice I would greatly appreciate it!

In December of 1999 we bought a beautiful 4 bedroom Victorian home. This house was our dream house! We made the mistake of not doing a final walthrough of the house prior to closing. After closing we went to the house and discovered that the sellers had turned the utilities off early. This was in the middle of December (in Ohio) in a house with hot water radiator heat. Well, needless to say all of the plumbing and heating system froze up. We ended up with burst pipes, cracked radiators, and tons of water damage. The total amount of the damages exceeded what we paid for the house. We tried to get help from our realtor and the sellers but to no avail. We filed a lawsuit against both, but the sellers filed for bankruptcy which put our entire case on hold. We continued to pay the mortgage for this uninhabitable home as well as rent where we were living. Finally after the birth of another child we could no longer afford to make two house payments so we were forced to file for bankruptcy in order to let the house go. (finalized in August of 2001) Now our credit is ruined. While we can afford a house payment we cannot get a loan to get a house. Does anyone have any suggetsions as to where we can turn for help? We are getting desperate because our current house is way to small for the 6 of us. Thanks for any advice!

Re: Forced into bankruptcy but need house NOW! - Posted by Joe Clifford

Posted by Joe Clifford on July 18, 2002 at 24:14:39:

Dawn –

Assuming that you have a roof over your head, a little bit of patience will do you a lot of good.

If you have:

(1) Reestablished mainline credit (e.g. got a couple of secured credit cards, bought a car) with a flawless payment history since the BK discharge. Reaffirming a car note and keeping the payments current also counts here.

(2) Good payment history/credit score prior to the BK.

(3) Good current debt ratio.

(4) Can document the reason(s) for your BK as a one time problem (e.g. job loss, act of God, medical problem) that has since been solved (exploding water logged house should fit the act of God criteria I would think, especially if you have good docs/paid repair bills)

If you have all of the above there are a lot of good lenders who will lend to you 1 year after discharge. Not filing date, discharge date (get out your discharge letter and circle the date on your calendar)!

Wait till the day approaches, get all of your credit reports, make sure you’re looking good since the discharge and start calling lenders. Some of the bigger nationals (e.g. countrywide, quicken, lendingtree) have special BK programs, the better locals do as well. Don’t let anyone pull a credit report on you until you know for a fact that they will lend to someone w/ a BK only a year old – recent BK + “actively seeking new credit” can be a big no no in the lenders eyes.

Plan on being grilled, but the one thing to remember is that the lender loves you folks – the lender will be writing a high-interest low-risk note (you can’t file again for 7 years and your credit “sucks”, thus the higher interest rate) which is just peachy with the lender.

If you have a good realtor/broker working for you as a buyers agent, ask them if they know a good post-BK lender (if the answer is no, you need a different realtor). A good realtor can often pave the way with a local lender and make sure that you’re not getting screwed on the interest rate – he/she should know the ropes and what is reasonable/unreasonable for a rate as well.

Get a loan commitment in writing prior to shopping and off you go – don’t be too choosy on interest rate initially, just get back in your “own” house, make on time payments for a year and you’re golden for a refi…

If you haven’t managed to accomplish steps 1 - 4 in the first year since your BK, you need to get to work or you’ll never get back in a house via a “regular” lender (much less back to A credit). Late payments, etc. are death on somebody with a previous BK, especially since the BK will typically pound your fico/credit score below 500 and it’s up to you to climb back up from there.

Re: Forced into bankruptcy but need house NOW! - Posted by NA

Posted by NA on July 17, 2002 at 13:22:44:

There is a post above you might be interested in. Here is the link:

Re: Forced into bankruptcy but need house NOW! - Posted by michaela

Posted by michaela on July 17, 2002 at 06:37:01:

where are you? maybe there are some people on this board, that are in your area, that might have something for you to look at.
also, you may want to read up on ‘subject 2’ deals.
you might also consider putting some kind of explanation of your situation into your credit file, so everybody that runs your credit will get that automatically along with the report.
just some thoughts.
good luck with the lease/option.

Re: Forced into bankruptcy but need house NOW! - Posted by Craig

Posted by Craig on July 16, 2002 at 23:14:51:

You should be able to buy yourself a nice house with little or no money down. The catch is you need to find a great seller not necessaripy a great house. Look in your local classified ads - key words Rent to Own, or Lease Option. These properties are owned by investors and you can probably get into one with a few thousand dollars down, if any at all, and then rent to own the property from the investor. Be prepared to explain your current financial trouble and be honest. Offer current pay stubs as proof of income and ask the investor if he/she knows of any private lenders that may be able to help you refinance the house when your option expires. Don’t be shy about calling them and asking questions. This is there business and they love it!!

Re: Forced into bankruptcy but need house NOW! - Posted by Dawn

Posted by Dawn on July 17, 2002 at 07:07:26:

We live in Piqua, Ohio. We are wanting to buy in either Piqua, Troy, or Sidney Ohio. The house we are loking at now is in Troy.

Re: Forced into bankruptcy but need house NOW! - Posted by Dawn

Posted by Dawn on July 16, 2002 at 23:33:18:

We check the papers every day for lease options and land contracts. We have looked at several and they have either been way over our price range or absolute DUMPS. We don’t have the time or the resources to completely redo a home. Today we looked at a house where the woman wanted $113,000 for a house with wires hanging out of the walls, living room with a wall thrown up to make a bedroom, and all the walls floors, and doors were in terrible shape. But she thought it was great because they had thrown up an addition on the back and put in a hot tub.If she sells it for a dime over $60,000 she has been overpaid. Another house we looked at they were asking $98,000. A pitiful house with a great yard. I did a little research and found that they had only paid 53,000 for it 2 years ago. I understand that we are going to probably have to pay more for a house because of our circumstances but double the value? We have found another house that we love. The are asking $114,000 for it and I am guessing (just based upon all of the properties we have looked at and the neighborhood it is in ) that it is probably worth around 130,000. It is for sale by owner. My husband did ask the seller if she would consider lease purchase and she said to call her back next Monday.

Re: Forced into bankruptcy but need house NOW! - Posted by michaela

Posted by michaela on July 17, 2002 at 07:37:31:

how about checking out where the closest rei club is to your area and going to the next meeting.
be pro-active and make a flyer, saying what exactly you’re looking for and in what area. maybe they have a marketing session where you’d be allowed to come up front and market ‘your family’ for all those homeowners there. people are usually impressed with others, that are pro-active. so, they see, that you’re not a victim. that would help you in that situation.
and your phone might just start ringing off the hook with people offering you houses.