contract for deed

What is the name of your state? IL
Our credit union told us we cannot sell our home using contract for deed because they hold the deed. Why can't we use a cfd and make the payments ourselves?

[HomeGuru]

[quote]Originally posted by G. Baker
[b]What is the name of your state? IL
Our credit union told us we cannot sell our home using contract for deed because they hold the deed. Why can't we use a cfd and make the payments ourselves?

**A: because your credit union said you can't do that. If you want to sell, sell by way of cash or conventional lender financing.
No contract for deed is allowed because your note most likely has a due on sale or transfer clause. Ask the lender if purchase money or second mortgage owner financing is allowed.

[BrokerRE]

In my state we refer to this type of sale as a Land Contract sale. Most if not all current lenders have a due on sale clause, which means simply that if you sell your property, the entire amount of the mortgage is due immediately.

However, I have never ever seen any financial institution enforce this due on sale clause. Of course your credit union could be the first. It has been my experience that as long as the payment is on time, they'll never bother you.

My advice would be to first, find a Mortgage Broker who has access to Lender Lab. My mortgage Broker has access to it, and we get people financed that honestly shocks me. For example, we're closing on a home in two weeks, and the buyer has a 4 month old bankruptcy. Almost anyone can find an 80% mortgage.

If your buyer is so bad that they can't find financing, then I would advise you against extended him credit.

[HomeGuru]

I have seen lenders enforce the due on sale clause based on various scenarios ie. the Buyer fails to obtain or renew hazard insurance, the property becomes run down due to lack of maintenace, is used as a rental and the mortgage loan was made to an owner/occupant, property owner was citing for building, code, health and enironmental violations, property was used for business in a residential zoned area, mortgage loan in default, loan interest rate was low and the prevailing rate was much higher**************..

[BrokerRE]

But, none of those reasons were for selling the property on a Land Contract, or Contract for Deed.

I didn't say it couldn't happen, just unlikely.

[HomeGuru]

[quote]Originally posted by BrokerRE
[b]But, none of those reasons were for selling the property on a Land Contract, or Contract for Deed.

**A: sorry, I forgot to include that as a reason too.
**********
I didn't say it couldn't happen, just unlikely.

**A: ok.

Broker RE - I know of 100% financing with no seasoning after BK!

[BrokerRE]

Yes, I know.

But they still have requirements as far as tradelines, and credit score.

Very few people file bankrtupcy, keep good tradelines, and a good credit score. It happens, but it's rare.

If you honestly do have a place that does 100% financing with no tradeline requirements, and very very poor credit scores, I would love to hear about them.

The 100% with no seasoning after BK is with a credit score of 640. I agree that most people do not have score of 640 after a BK, however, I (surprise of surprises!) did have a client with a score that qualified and I was able to get funding for him. He was smart in the sense that he recognized his need for BK and filed it immediately, instead of allowing his credit to deteriorate. Granted, it was only one client, and since you and I are in the same field, I'm sure you will agree with me that most of these programs are come ons - but it is very nice when these things work out.

I am in California, and I'm not sure which state you are in, but if you are in California as well, I would be glad to share sources with you.

[BrokerRE]

I'm in Michigan, however, don't let that stop you. None of the investors we use are in our state anyways.

We have a mortgage company that shares our office with us, and it's very very informative.

I'm always looking for creative financing avenues. Have you ever searched through LenderLab? It's expensive to sign up for, but holy cow, do they have the investors.

First Franklin has no seasoning requirements for BK, and I think their median credit score requirements may be lower than 640.

You've made your account so that you cannot be e-mailed, so send me an e-mail, and maybe we can exchange ideas.

Originally posted by BrokerRE
Yes, I know.

But they still have requirements as far as tradelines, and credit score.

Very few people file bankrtupcy, keep good tradelines, and a good credit score. It happens, but it's rare.

If you honestly do have a place that does 100% financing with no tradeline requirements, and very very poor credit scores, I would love to hear about them.

Rare? It's how you spend and live after a BK which we had in 1993. Yes, I did buy a car one year later......then in 1998 I purchased a home and just was about to sell this one until my husband got laid off. Our scores are good....close to 680 and up. We just never got into any credit cards anymore. Now we have 2 decent cars almost paid for. I did take lay-off insurance on one of them....it was presented to me and .....trust me it's a good thing to have.