Need advice badly

[chakra7]

OK, this is the situation as it stands today: My house is up for sale. It is a practically new house. I filed for Ch.13 in 2005. The majority of my payment is toward the mortgage. My attorney assured me that when my house sells that would drastically lower my payments, significantly. My real estate agent says she thinks my house will have no trouble selling. Yes, I am aware of the current real estate market and how homes are selling very slowly. There is a another home that has been on the market since last Nov. so the sellers are very motivated to sell. My agent contacted their agent to see if they would entertain a lease purchase. They are interested. Their agent wants the terms set at 6 month lease then purchase. She says she doesn't think I can get a loan in six months in a bk. I was looking more at 1 to 2 year lease, then purchase. She doesn't know if the sellers will be comfortable with that AND doesn't feel that my house will sell as quick as my agent and I believe.

Any opinions, thoughts, suggestions welcome. I wish people would try to work with you first. I understand their concerns, I would have them too, but if no one is willing to work with you how do you improve your situation? Also, I had read that lease/purchase is more advantageous to the sellers than the buyer - is this the case or what has been others' experience with this?

Also, has anyone gotten approval to purchase a home after leasing while in the bk? If so, how was it done or what did it involve?

Again, thanks for input.

[lrprn]

I'm sorry...I don't have experience in this type of real estate agreement. Hopefully one of our more knowledgeable real estate/property 'gurus' will come along and provide some insights.

I can say that Ch 13 members have had extreme difficulty getting loans while inside an active Ch 13 case, and that was when the lenders were still giving out easy credit. Going to be even harder now.

Have you considered surrendering the house inside your bankruptcy to reduce your payment that way? Since the foreclosure and bankruptcy were at the same time, the hit on your future credit is much less than if they weren't so close together.

Whatever happens, hope everything works out in your favor!

[chakra7]

Hi. Thanks for your response. No, I actually don't want to surrender because I put my house up for sale and have started the approval process through the trustee. My real estate agent thinks the house will sale at a profit and I can use portion of that money toward a lease purchase down payment. So I actually need to be able to sell my home so I can lease purchase another one where the sellers are interested for the moment. The only real obstacle (of course, besides my house selling) is the seller's agent.

[chakra7]

Good news, I think. I wanted to pass along this information for anyone else who may find themselves in this predicament and did not already know this: My attorney's office says that you can do a lease with the option to purchase while in the 13, and that you don't need permission. You just have to get the contract approved first. There is also no required length of time to lease; that's agreed upon between you and the sellers.

I didn't know this information prior. I assumed you could not purchase anything while in the 13, but not so - you just need permission and of course, good reason. This has truly took a load off because length of time for me to lease has truly been a sticking point in my negotiations thus far...

Oh yeah, the house I'm in talks about has been on the market for seven months now...

[jgarton244]

I would not sign any agreement to lease/purchase the house until I had a contract secured on your current home. I would then stipulate in the contract that the lease/purchase deal is contingent on closing od the sale of your current home. You do not want to get stuck with both mortgage payments and a lease payment at the same time. In todays market, a buyer may put a contract on your home, and then may not qualify for a mortgage which could void your sale, or they may change theri minds and walk away from the contract. Once your sale is closed, you will be in a position to negotiate a better deal. I would try to get one year lease/purchase option. You can obtain an FHA mortgage while in chapter 13, after one year of plan completion or more. However, you must show that all payments to the plan were on time, and that no debt has been paid late during your time in the plan. It took three months for us to obtain a FHA mortgage, while in BK 13 plan. We found a bank (bank of America) that offered FHA loans. We filed all the paperwork for the loan, and were approved, with final approval coming when we sent a letter from our trustee giving us permission to obtain the mortgage. Bank of America was easy to work with, and we had no issues with them, even though they were in our BK plan as a creditor for credit card debt. I handled all by phone/fax and mail, dealing with BOA in Charlotte, NC for our mortgage in Kansas.

Yes, the housing market is slow, but I have found over the years, selling 8 homes, that you must price your home at what level is needed, based on your market, to sell within 46 days. I also found that by adding a clause to my agreement with the realtor that I would pay an extra $500. commission to the selling agent only improved traffic considerably through our home. If agents are showing homes in your homes price range, they always showed ours, as they would make a little more commission of ours sold, versus another home around the same price.

Good luck

[BigJohn]

What interest rate were you able to get?