foreclosure idea?
2009.01.20
thanks to tmbo (ITO) for pointing me to the idea
The best strategy I have seen banks do is to foreclose on the house, then rent it back to the borrowers with an option for them to buy it back at market value once they get back on their feet. The borrowers tend to take better care of it than just any renter, as the bank sits on the house for a couple of years to see if the market will come back. WIN/WIN.
supposedly sourced from a NPR story, i can’t find it now.
Pretty interesting idea, but one that sounds much better (especially for me since I bought my house months before the big housing market pop) is where you approach the bank say you can’t make your payments but found someone who is willing to buy the house at market value. Said rich person buys the house outright at the market value then turns around and sells you the house for the same amount.
Example: You bought your house at $100,000 before the pop, house is now worth around $75,000, rich person buys house for $75,000 cash to the bank, sells the house back to you for $75,000. You cut your mortgage by 1/4th, rich person gets their money back.