Can I have my in-laws purchase my home through a short sale?
We have recently filed bankruptcy and chose to keep our house. We did not sign no reaffirmation aggreement because we are not sure what are payment will jump up to once our ARM ends in May. I would like to know if we choose to do a short sale on our home can my in laws purchase this home from us and continue to let us live here? Do you think our mortgage company will allow this? We do not want to lose our home but like many others we are scared to death what our payment will be once this ARM loan adjusts. My in laws are very very credit worthy and would be willing to do this for us. We are just not sure what the risks will be now and in the long run. Also would we be able to purchase this home back from them in about 1-2 years? Thank you in advance for all serious answers.
My-in laws will do this as a short sale and yes will more then likely pay what the appraiser appraises it at. We owe more then what the house is worth right now.
March 27th, 2009 at 7:48 pm
Are your inlaws going to pay market value for the house? If so, the mortgage company may go along with it.
Of course you can buy it from them – if they can give you a loan for the purchase. If not, 2 years out of BK, the same house you couldn’t afford now, it’s doubtful.
March 29th, 2009 at 5:34 am
If you sell the house to your in-laws your mortgage goes away. There are very few loans that are assumable by the new owners. That means that when title transfers, the mortgage company will want the loan paid off in full. If your in-laws have enough money to buy your house outright that’s fine. It’s either that, or they will need to apply for a new mortgage.
April 1st, 2009 at 6:32 am
Hey Bubbas – This scenario will be very lender specific. You can call your lender and ask for “short sale” details and also ask who may or may not purchase the home from the lender.
In your last question you want to know whether you may buy it back in 1-2 years? With a bankruptcy and a short sale on your credit you will be limited on what you’ll be able to qualify for. Most likely it will affect you for the next 7-10 years from the time of the short sale.
You are fortunate to have good in-laws. Good luck with all of this.
April 4th, 2009 at 5:26 am
It is up to the bank to decide this one. Once your in-laws purchase the house, they can do what they want with it, including letting you live in it. The only stumbling block is the short sale. They may insist on getting the entire amount of the loan or they could refuse to close. If the bank thinks they can get more money by selling to someone else, they will forclose and sell the house to whoever will pay what they are asking.
Another alternative is to ask your in-laws for help with the payments for a few years. Perhaps they will co-sign for you on a refinance.
April 6th, 2009 at 11:53 am
I am a Realtor, I am familiar with short sales and have accomplished a couple. I just read this today and the answer to your question is no you can’t do that unless somehow your bank is not aware you are related to the buyer. See Following Link: