I was working on a deal in upstate NY in which the owner was 8 months into foreclosure, with 10k in mortgage arrears. As of 2 weeks ago, we negotiated a sub2 deal in which he would vacate the property. However, approximately 3 days after that (prior to going to contract), he received a call from his mortgage company offering a forebearance agreement.
They requested that he pay 5k to cure the mortgage and mortgage payments close to what he was paying before. This created a tremendous problem because he has a family member willing to give him 5k so that he can save his house and he therefore doesnt necessarily need me. However, he does not want to take money from his family and would rather get it via other means.
Therefore, I think that a possible solution would to be to still go sub2, pay the mortgage company 5k to cure, and arrange a lease option with the seller. In other words, he would deed me the property, I would pay the 5k and allow him to repurchase the property for a preset amount in 12 months. The numbers are as follows:
Appraised Value-232k
Mortgage Balance (w/arrears)-175k
Back Taxes-10k
Judgements-3k
Assuming that in 12 months, he can qualify for a mortgage, I would sell it back to him for somewhere in the ballpark of 210k. In that 12 month period, he would make lease payments to me which would be equal to the mortgage payments. Does anybody have experience doing deals like this? Can you suggest a better method?
