Tenants may go for owner finance - What if they go bankrupt?

In 99% of owner finace there is no credit check most that are purchacing this way already have challanges so the advisor of the get credit check should retract and know that this is why they are purchacing this way in order to clear up issues and yet have the ability to purchace a home.

brenda, my stance is that someone offering owner financing ought to know what kind of borrower he is dealing with. if i had the wherewithal to lend and was approached, i would absolutely insist that i be made aware of that potential borrower's credit record. it would be foolish not to do it.

and i recognize what you're saying about those who use this type of financing...i simply encourage owners contemplating offering these loans to be cautious.

i don't think urging caution is something i need to retract. but i won't anyway.

You may be able to sell the mortgage to investors once it is created. There are investors that purchase owner financed mortgages. Selling the mortgage would completely take the burden off of you. You won't get the full price of the home, but in most cases, you get about only 10 - 15% less than that amount. A good place to sell a mortgage is enoteconnection.com. Hope I helped.

can i file bankruptcy if i owner financed th house

As a seller offering owner financing, I would most certainly check credit history and require several pieces of proof that the mortgage payment is doable, ie., within 30-35% of gross income. There are people who have the down payment, but lack good credit standing and therefore, would not qualify for a traditional loan that would not charge an exorbitant interest rate. Also be sure the taxes are escrowed separately so that you can be sure the taxes are being paid or are paid up to date. This is one way to have a heads up on the financial condition of the buyer on a regular basis such that the seller could have an option to foreclose on the property before a bankruptcy is begun that would certainly tie up any and all assets of record.

Once a sale is recorded, the seller is the first creditor so the property is not lost if the buyer defaults on the loan. Also, buyers and sellers are able to make conditions of the sale and what may govern it as far as triggers for action. :?

Personally, I would not do owner finance with them. They seem like to much of a risk and potential headache. I understand that they have had financial problems in the past that might be still lurking. If though you would still retain the deed until they pay it off, the likely hood of them paying you off completely is probably very slim. They should figure out some other way to try and get financing. They have credit problems for a reason.

I can understand peoples a,prehention. But I got my home through owner financing after a messy divorce. I could not get a loan to save my life. I paid off the loan in 5 years in full with interest. There are good people do your homework but don't shut the door on some of us that just needed a chance.

Thanks for responding, "home." You're quite right in saying that many people deserve a chance. Financing, however, for those who've suffered credit problems in the past is high-risk, and it's generally something that a private individual would be wise to avoid.

in the case agreement of deed,if the buyer defaut,the seller how to do?

Hi le nguyen,

If the buyer defaults to fulfill the terms and conditions of the agreement, then the seller can take actions against the buyer as per the agreement. The seller may even foreclose the property.

One thing you attorneys need to keep in mind is that some of us werent as priveledged to have parents put us in colledge to make alot of money to not worry so much about money! There is real circumstances out there where people arent as fortunate as others, so to act like people are stupid to owner finance to people who are less fortunate that cant get a loan from a bank is ludicrous on your part, it is so judgmental for you to tell people they are basically stupid to try to help a less fortunate person as yourself, I am glad you are so well off you dont have to worry about where you will have your kids gorw up!

Alisa, I believe you'd agree that there's an inherent risk in lending to someone who has exhibited a habit of non-payment in the past. Thanks for calling me a "lawyer" by the way...if I had their money, I would be among the "more fortunate." I doubt (no time to re-read it all) that I ever said owner financing was a "stupid" thing to do, nor would I have called any person posting on here "stupid." And to say, as I did, that such a loan would be something "wise to avoid" is far from telling someone that they're "basically stupid."

There's an old saying - "stupid is as stupid does." Does it apply to folk who honestly don't know quite what to do going ahead and financing the purchase of a home with their hard-earned dollars for someone whose credit background is shaky? No, not necessarily.

It's just wise to find out all the details before jumping into something that one doesn't really understand to begin with. But I'm sure you'll say that's a ludicrous statement, so go ahead...my skin's reasonably thick.

Wowie Zowie!! Lookie there, folks - it's ONE/ONE/ONE/ONE/ONE! And don't you know I'm about to spoil it by making the last one a 2!

I guess I've had nothing else to do in the last 3 years or so except try to help people and suffer fools gladly.

Oh yeah...please look it up before you rant and rave.