[mwgreco]

Ok, some you asked for more information in regards to the guidelines of a bailout loan... This is a 12 month Lease and Buy back loan... A Lease and buy back is when a lender will enter into a contractual agreement with you to purchase the home for a 12 month period and then sell you the home back (At the same price) The Max. LTV for approval is 85% (Meaning you must have atleast 15% equity in the home).. There is an actual LTV formula but I will spare you the calculations.... Your credit score and employement history will be checked, however, they are not a factor on whether your loan is approved or not...The borrower must have the ability to pay the monthly payments... The interest rate is a hard money status (10-12%) However, the best thing about this bailout company is that they will write you a Neg-am (Negative ammorization) loan (It's kind of like an interest only) so that the homeowner can make the payments on time...After 12 months, and since the home is no longer in foreclosure,. Ownership will be transfered back to the homeowner at the same price it was bought... You do not need to put any money down when the home is transfered back into your name.. You will receive a "Gift of Equity" which constitutes the down payment.. (That's why you must have 15% equity or more in the home).. This company is NOT in the business of taking homes... They don't want your home, they just want the interest on the loan for a 12 month period....I hope that outlines the program enough, please feel free to email me with any questions you might have... Thank you

[aaron]

Many lenders offering such a loan anticipate that the borrower won't be able to repay the loan, and thus that they will be able to declare the former owner to have forfeited and (as you note) profit from the min. 15% equity in the home.

It sounds like what you propose is that the homeowner instead effectively has two loans - one for the full value of the home, at 12%, and another which pays off the loan payments over the course of that one-year period. Presumably the borrower would be paying interest on both loans, for a total effective interest rate of what? About 24%? And at the end of the year the homeowner would be obligated to either come up with new financing or lose the home.