What a dilemma! - Posted by Joe

import · July 31, 2003, 7:59pm

Posted by Ed Garcia on August 01, 2003 at 11:22:09:

Joe,

It?s time to dance.

Here is a rough idea on how your letter will read.

To whom it may concern.

Mr. and Mrs. ------ rent is current and they are in good standing.

They have been a tenant since XXXX and we consider them a good tenant.

Based on their track record, if they wanted to rent from us again, they would be welcomed.

Sincerely,

Joe XXX

Joe, you can modify the letter, and say what you feel comfortable saying. Remember this letter is yours and comes from you. You know that this tenant had problems and still came back and paid you. Had they not, you would have thrown them out.

When you mentioned their track record you took into consideration their hardship and they still brought you current when they got into trouble. Had he not lost his job a couple of times, they would not have been late.

Ed Garcia

import · July 31, 2003, 7:59pm

What a dilemma! - Posted by Joe

Posted by Joe on July 31, 2003 at 19:59:55:

I “sold” a house on lease/option about 10 months ago. It has about $60,000 in equity. The tenant/buyers are working with a mortgage broker I referred to them. The broker thinks they have a chance to get financed based on FICO. Good news so far. But here’s the problem.

The broker wants a letter from me stating that the tenants had zero payments 30 days late, zero 60 late, and zero 90. Well, the tenants have had a couple of 30 day lates in 10 months. The husband has had trouble keeping a job and got laid off twice since moving here from another state. He eventually got all the payments straight.

So, if I want to get my $60,000, I need to fib about the payments. I don’t like fibbing, especially when it has the possibility of being deemed as fraud. Don’t get me wrong, I’m not taking that possibility lightly.

But here’s the rest of the story. My business is very very close to banktruptcy. I’ve had a run of bad luck with finding good deals for several months. I do REI full time and my family depends on my income. We’re very close to going down. My wife and kids need this money. It would get me started again (I know this run of bad luck isn’t going to last forever). And it would keep my family in shoes and twinkies for a long time.

The broker said he only wants a letter from me. I asked if lenders will ask for bank statements to prove the payments were on time after they have my letter. He said it depends on the lender. Now what would happen if I fibbed in the letter, and they later came back and wanted bank statements or cancelled checks? I could refuse to give them, stating it’s private info, I guess. Sounds transparent as he11 though.

My tenant knows he paid late. I’m a very truthful person, but darn it all, my family and business are top priority. Could I go to jail if I fibbed about a stupid late payment or two? I know people who do a heck of a lot worse than that and they aren’t even about to go under.

Any thoughts? Feel free to berate me for thinking about it. Unless you are in this position, you couldn’t know.

import · August 10, 2003, 9:46am

Re: What a dilemma! - Posted by jafon2k

Posted by jafon2k on August 10, 2003 at 09:46:53:

Just because the mortgage guy is requesting specific periods because he is reading from a form does not mean your letter has to be so specific.

I like Ed Garcia’s response letter. You need to do this. The tenants have showed they are conscientous by bringing you current. They will likely extend the same courtesy to the bank. Bank statements can explained as your own delay in depositing amounts to the bank. Tell the broker to submit to more than one lender. Pick up the extra cost of submission if necessary ($300 to make $60,000). Make sure it is one that won’t ask for bank statements. Yoir tenant quailified to purchase the house under your option agreement, which is also a testament.

Your family needs this!

Just as they say in the stock market. Past performance is no guarentee of future performance. So with a general response letter I don’t see how it should warrant any backlash to you.