Turning Renters into Buyers - Posted by Carmen_FL

import · December 29, 1999, 9:02pm

Posted by lesliel on December 30, 1999 at 02:59:35:

I have found an attroney in the yellow pages who will do just that. They are in the BK business. They will negotiate discounted payoffs, and lobby for removing negatives. They claim they don’t just push a client in to a BK. So far it seems to be true, but the fee is not cheap, I think $300 to $600 is common. According to their sales pitch they don’t feel the “credit-cleaners” can do a good job legally, and a real law office has advantages. I haven’t taken the time to follow thru and make a buyer out of one of these yet. I do send my T/B there on occasion and may see some results sometime.

As to your question would they come off if paid, they would stay on and show paid, unless you negotiate for them to be removed, and that is an art.

Leslie

import · December 29, 1999, 9:02pm

Turning Renters into Buyers - Posted by Carmen_FL

Posted by Carmen_FL on December 29, 1999 at 22:02:51:

I have come across SO many people who are a whisker away from qualifying for a mortgage, but need a little time and handholding to clean up their credit. I don’t have time to do this myself, but they would be great potential future pipeline buyers once they get qualified. Does anyone know of a legitimate agency or other source that would literally walk these people through the credit clean-up process, even if for a fee? I am not talking about the Credit Counseling people - I think they just deal with current outstanding debt (I could be wrong).

For example: a woman who is still paying hospital bills for the birth of her first child 5 years ago (no insurance); she has several medical collections of $50-$1000 each betwen 1995 and 1997, which she could now afford to pay, but since the collectors have stopped calling I think it’s “out of sight, out of mind” for her. But it looks horrible on her credit! I can’t afford the time to “baby-sit” these people, and don’t have the knowledge to negotiate payoffs, etc. with written-off collections - would these even come off the report if paid? Would it help raise the score any?

import · December 30, 1999, 1:43pm

Re: BRIDGE PT’s - Posted by Bill Gatten

Posted by Bill Gatten on December 30, 1999 at 14:43:48:

Carmen,

Much of my company’s revenue is derived from our solution to the very scenarios you describe.

For some of these transactions (if not most), when the seller is not in too big a hurry for all of his cash (e.g., if he can wait 6 months or so…which me might have to do if he lost his buyer anyway), you might suggest that the property be placed immediately into a NARs PACTrust™ and ocupied by the buyer as a co-beneficiary, with the understanding that once the buyer’s problems are cleaned up, the trust will be terminated and the current loan refinanced by the buyer.

This arrangement, of course, gives the buyer virtually 100% of the benefits of ownership NOW (including all tax deductions), without having to wait and lose more tax dollars; and it gives the seller his down payment money now as well. Also, such a plan can even justify a higher purchase price (e.g., a premium for hthe seller’s cooperation and understanding).

Think carefully about the advantages here, Carmen: you make your deal now; frozen equity, higher price, locked-in mortgage loan for you; locked in sale for the Realtor (he/she gets the commission now, rather than waiting); locked in sale for the seller; protection against devaluation from the seller’s standpoint (or inflation from the buyer’s standpoint); no threat of penalty from Due-on-Sale Clause compromise; etc. And it gives your client ample time to claar up his credit or cash deficiencies without losing out on any of the benefits of homeownership in the meantime.

Under such an arrangement, when the buyer is ready to finance the property, his ownership interest in the trust (which shows upon on page 3 of of the 1003 as stock and bonds: not in the real property schedule) can be supplanted for the down payments requirement. Though the seller might opt to wait until the financing to collect, as many of our “Bridge PACTrusts” are done because the buyer doesn’t have the “money” yet, rather than not having the credit yet–'works both ways).

Bill Gatten

P.S., As far as the seller’s qualifying for his new loan on his replacmeent property in concerned…it’s never been a problem. We have a standard form letter as a part of our program that satisfies the new lender. It clearly shows that the former property has been adequately disposed of ('has never failed to pass underwriting to date–they ee it as akin to a Contract or Wrap sale).