This home that I helped the renter purchase was a unique situation but unfortunitly not so rare these days. The home was occupied by a tenant that had been maintaining the home and paying rent on time every month through a property management company. However the owner/investor of the home quit passing on the rent payment to the bank to pay the mortgage.

The renter found out about the default from the official letter that was hung on the door one night when he came home from work informing the occupants that the home was now in foreclosure. The owner had defaulted nine months ago and had been pocketing the renters money. The tenant, who is actually a family member, called me when he got the notice asking what his options were. We had actually been looking at homes to purchase over the previous couple of months so we talked about actually purchasing the home and stopping the foreclosure.

We contacted the seller and he was up for the idea so he listed the home through a broker, we wrote an offer, negotiated the short sale and successfully purchased the home saving the renter from having to move out unexpectedly.

The first time home buyer financed through an FHA loan and only had to put 3.5% down. We negotiated a deal at $180,000 and it ended up that the mortgage payments were actually less than what he was paying in rent. That’s a win!!!

The total time to negotiate the short sale was just over 3 months. The lien holder was Bank of America.

If you are in this situation, or know somebody that is, remember you do have options other than moving out!