A Riverside, Calif. real estate broker has debuted a Short Sale Lease Back program. Other organizations are coming up with similar programs to help home owners get back on their feet again after a short sale.
Bob Irish, with Lake Hills Realty and CEO of National Short Sales, has facilitated a Short Sale Lease Back (SSLB) training program for agents nationwide. The program allows home owners to sell their underwater home to a nonprofit company that would then set up an arrangement to allow them to remain there for up to three years while paying a fair market rent on the home. If the renter keeps up with their payments, he or she would be able to buy a home again at end of the rental term.
More lenders are warming up to the idea of a short sale lease back, but some are concerned that the program may be an “escape mechanism for sellers who want to exit their underwater mortgage with no consequences and sell to a company that allows them to stay in their home,” Realty Times reports.
In order to participate in the program, a home owner must have missed payments or be nearing default and face a provable hardship. They also must demonstrate the ability to pay fair market rent for the property. If a home owner qualifies under SSLB’s terms, the program will submit an offer for the home at a fair market price to the lender. The offer would also be careful to disclose the details of the lease back agreement as well.
“Full disclosure is key,” Realty Times reports. “It’s fraud to fabricate information or withhold information from your lender to make arrangements apart from the contract for the program.”
Source: “Short Sale Lease Back Alternative to Foreclosure Available,” Realty Times