Need help with bad credit client - Posted by PET

Posted by Pet on April 27, 1999 at 08:55:38:

Thank you all for your answer, they used to own a home before wich paid off , but never late on it. they want wrap mortgage.

Need help with bad credit client - Posted by PET

Posted by PET on April 26, 1999 at 08:50:40:

A client call on one of my add owner finance- they have a
bk discharge and still have bad credit, but they want to put 10% dwn if i do owner financing for them. Should i give them a l/o for two years or do warp mortgage for them?.Please any help will be helpful

Lease-Option - Posted by Sean

Posted by Sean on April 26, 1999 at 12:25:21:

I would say definitely do a lease-option, not a wrap mortgage since that lets you keep better control. Chances are (I’d say) pretty good that they won’t find it easy to qualify for a loan in 2 years unless they’ve got their act together credit wise since their bankruptcy.

Where are they living now? Where did they live before? Contact those people and determine how well their rent was paid. If they paid on time, and no hassles, I’d give 'em a green light. If they didn’t …

Also some mortgage companies give out a booklet about responsible home ownership that’s been shown to cause a statistically significant reduction in default/foreclosure in those people who read the pamphlet. See if you can pick up anything like that to help prepare them for that kind of financial decision.

Re: Need help with bad credit client - Posted by JohnBoy

Posted by JohnBoy on April 26, 1999 at 11:59:40:

How long ago was the bk discharge? What kind of bad credit to they still have? Is this bad credit they incured since they filed the BK?

Another thing you should do is take their credit report to a mortgage broker to see what all they will need to do over the next 2 years to get refinanced. If they have no hope of getting financed in 2 years then don’t except them unless you own the property and plan on carrying them longer than 2 years.

If they have shown that they haven’t learned their lesson since filing the bk then chances are you will be chasing them every month to collect the rent also.