How can I work this? - Posted by C Barbeau

Posted by C Barbeau on June 30, 2003 at 20:31:38:

Thanks for the info Greg. I definately wouldn’t want to do that. As it turns out, the buyer has backed out anyway. Thanks for your input, though.

C Barbeau

How can I work this? - Posted by C Barbeau

Posted by C Barbeau on June 20, 2003 at 11:53:02:

Here’s my deal…

Selling my home for 279K (existing note 165K).
Buyer has qualified for a 250K loan and can come up with 10K cash.

I would like to carry a note for the balance of 19K, but this won’t fly with the buyer’s lender. Is there a way I can sell the house for 260K and then follow it up with a 19K note “after” the close of escrow?

Any input would be appreciated. Thanks!

C Barbeau

Re: How can I work this? - Posted by James

Posted by James on June 20, 2003 at 15:36:10:

Is your borrower qualified for $250K based off the purchase price being $279k? If so that is because your borrower may only qualify for 90% financing. Find out that info. If he only qualifies for 90%, you can lease option it to him, and in one year, many lenders will treat it as a refi against appriased value and he may qualify better. If the $250K is the max because of his income ratio, then there is no way they will allow you to hold a second because they have to include his payment to you in their debt calculation and he does not qualify for as much. If this is the case, then you have no true recourse that I know of except sell him the home for $250K and work out arrangements to have him sign a note to you for $19000. Of course, once the closing takes place and he “owns” the property, there is no legal way you can force him to sign a note for $19000. However,if he did sign a note to you, I believe it could be considered loan fraud because he failed to disclose that to his lender. Do you have other buyers? You may want to consider that.
Hope this helped.

Re: How can I work this? - Posted by C Barbeau

Posted by C Barbeau on June 20, 2003 at 16:35:00:

The 250K amount is the amount she’s been pre-qualified for based on income. I think you’re right about having a note signed after the close. It sounds like I might just be better off finding another buyer. There’s been considerable interest in the property. If I wait, I’m sure a more qualified buyer will come along.

Thanks for your input. It reinforced what I suspected and helped a lot.

C Barbeau

Re: How can I work this? - Posted by Greg

Posted by Greg on June 30, 2003 at 18:04:51:

Iyit is called a “silent note” and is VERY dangerous. If you take the buyer to court, there will be evidence given that you entered into an illegal conspiracy to defraud a lender. Two felonies you could do without!