Earlier this year my sister and her husband lost their home to a sheriff's sale on back taxes. My sister, showing her usual bad judgement had hidden the notices from her husband resulting in their $100K home being sold for a little over $9K. My mother, brother and myself stepped up and were able to negotiate with the buyer and for $12K they agreed back out of the sale (They thought there was a sizeable lien on the home which there wasn't.) We then entered into a legal agreement with my sister and her husband where we, as lenders would "own" their home for one year while they paid us a monthly payment after which, at the end of the year they would be required to pay us in full at which time we would enter a "quit claim" and return the house to them. If they fail to pay us back on time, they would be considered in default and they would forfeit their house to us.

To add more "drama", they had attempted to file for bankruptcy thinking that it would save their home. Although they never completed it, their credit reports are showing they filed (from what I am told) and they have been unable to secure a loan to pay us back because of this. Now they have been able to secure some letter or form that states they did not complete the bankruptcy. But my mother is beside herself that they will not be able to secure a loan at all since the home is not listed in their name.

Does anyone have any ideas how they can secure a loan? We arn't too keen on having to actually evict my sister from her home -- although we realize that it was poor judgement on their part that got them into this mess.