Lease Option Help

I’m actually living in a house that I am buying on a Lease Option from the actual Owner of the home! We have a 5 year lease option period and we’ve been in the property for about a year. The Property is in Indiana.

My situation is that for the past few months the owner has been desperate to get the monthly check. He’ll drive an hour and a half to pick up the check 5 days before it’s even due. I’ve been ok with that but today Chase Home Mortgage came by the house and was looking for the owner. I called my parents who are ALWAYS late on their mortgage and I told them what the guy from Chase dropped off. They described in detail what I had because they had the same thing brought to their house when they were 4 months behind on their mortgage.

Does anyone know any other reason why Chase would come to the house other than the owner not making his payments on the mortgage.

If this is the case… what should I do. I put 3K down for option consideration!

You’re getting ripped off. The owner hasn’t been paying the underlying mortgage and pocketing your money. You should have requested online access to the mortgage co. to see if it was getting paid. They are after the owner because this is the address they have for him/her. These kind of people give the lease option a bad name and hurt us legitimate investors. Herbster

Sounds like he have’nt been paying the mortgage on the property.
Start saving your money because it want be long before you get a notice to vacate, I would’nt give him another dollar, until he can show me that he has been paying the note… :argue

Good Luck

For the moment, you are a renter and had been paying the property owner rent each month. The owner’s mortgage probably has an assignment of rents clause that gives the lender the right to any rental income the property generates when the loan is in default.

Consult your own attorney about your rights and responsibilities for your situation and about actions that you might take to recover your option consideration. If the property goes into foreclosure, most likely you will have to go to court and get a judgment against the owner for breach of contract.

If the lender left a notice of default, then your attorney may advise you to quit paying rent to the property owner because the rents might not be rightfully his. The attorney may tell you to put the amount of money you pay each month into a savings account and hold the money “in escrow”. Don’t spend the money. You may need to turn it over to a court should your landlord start an eviction proceeding.

Read up on Obamas new Law that protects renters… you can read it at my site under the Investor Resources tab

One more example of why you should never make your payments directly to the homeowner.

Thanks everyone for your input. I spoke with them on the phone today and they said that they are not 4 months behind on the mortgage but that there is a dispute over a payment that they made and Chase is saying it was never made. I call Bull S***… I said if that’s the case then fine but can you show me a copy of your last statement for peace of mind. The lady was kind of like uhhhhhhhh… Let me talk to my husband!

My concern now is that if I stop paying them now, before the bank forecloses, I will breach the contract and not get my option consideration back! Is this a legitimate concern to have?

This is a touch and go situation. Do as Dave said and don’t pay them but rather have your attorney hold it in escrow. Have attorney write up something explaining the situation. Get that proof of payment from the seller to the lender and proceed. Personally you should get it done so that you always know the payment has been made. Herbster
My 2 cents anyway.

I completely agree with herbster, do not make that next payment until he shows proof that the loan is current and if he is indeed behind then you need to save your payments for the next house.

Wow… THE Wendy Patton? It is an honor to have you respond to my post! I have since requested the statement from the owner. He provided me a print out of his mortgage statement from his Online Banking through Chase. It showed the date the loan was originated and it also showed the number of payments he has made to date! The number of payments matches the number of months he has had the loan. Do you think this is enough evidence that he is current?

I sent this month’s payment out already because I don’t want to default and then not have rights to my option money!

That proof isn’t to bad but how do you know it hasn’t been modified? It would be better to get an Authorization to Release information so you can check yourself. BTW what did Chase drop off? Lenders just don’t come over for a visit. Maybe they got wind of a Lease Option and are thinking of calling the loan due. It may be in violation of the DOSC.

Chase put a Yellow Door Hanger Envelope on the door that said Important on it. It said please call 1800… It had some info for people facing foreclosure. At first I thought it was just a foreclosure assistant program that was giving information to everyone. I was the only one on the block that got one and I called the number… IT WAS CHASE. I asked the homeowner and they said that Chase knows that they are renting it out! I am really unsure at this point. They aren’t really helping me out obtaining any information!

At this point I’m not sure what to tell ya but this, play hardball with them and demand the Authorization to Release info. Say you won’t pay until this is done. Since these people are in a hurry to get paid, this will give them some insentive to comply with your request. Herbster

Thank you! Once again i agree with herbster in the fact that you should get an authorization to release signed or at the minimum be conferenced in on a 3 way call to the bank to confirm that the mortgage is paid current.

A thing like this happen to my son in Bend OR

They were rent to own a home and they all of a sudden got a visit from a mortgage guy checking on the property

He asked my son and his wife are you ( the landlord ) they said no that is who we are paying rent to

They then called the landlord and said what is going on and theytold him about the visit

He told them it was all bull

I told them find a new place to live and fast as the bank is ready to so to speak drop the hammer on the property and the owner

They were moving out just two weeks later when they went back to get the very last 4 or 5 things they found the locks changed

They then call the landlord again and he said just break in WHAT

I did a due dill on the property and found the landlord had done a deed -in - lue two weeks before WOW

When they asked how they were to get the last of there things and why he did what he did

He said they were full of it and they were the ones who changed the locks on him

So the next day they went by the property and found in the front windows of the home papers saying this is a bank owned property

They then took photos and emailed them to him and said have a nice life

So this goes to show in these hard times even the most honest sounding and looking sellers could /may just screw over the buy of some kind be it rent to own or sub - 2