What Do You Think About The Short Sale Lease Back Program?

Hi guys,

Wondering what your thoughts were on the short sale lease back program that is starting gain traction in the short sale arena.

Short sale lease back programs have been around for quite some time now. In an SSLB program, the homeowner short sells their home and subsequently rents from the new owner upon closing the sale.

Do you think this is a good idea for the homeowner? What have you seen? Any other thoughts?

Thanks!

Peter

Full Article: www.seattleshortsaleblog.com

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Replies to This Discussion

Permalink Reply by Smitty on February 8, 2013 at 10:34am

I'd love to know where that is gaining traction.  It definitely is not part of the New England market by any means.  If I were a new buyer I'd have a hard time renting to a homeowner that is likely in default.  It's not to say that all homeowners doing short sales are in default, but I would say a good chunk of mine are.  I only see this program sucessful if it is an investor buyer who wants a rental income, but I don't see this program a huge success anywhere.

Permalink Reply by Judi Fiolle on February 10, 2013 at 6:23am

Smitty, here in California property values are down about 50 to 65% so it is a great benefit to buyers of short sales to rent back to the seller. They will now have a much smaller payment and the chance to buy back their property in 3 years. Win-Win

Permalink Reply by Wayne Brooks on February 8, 2013 at 11:54am

I believe this is only being allowed when the buyer is a Non-Profit, meeting certain guidelines.  Of course, there are all kinds of new "Non-Profits" trying to  get in on it.

Permalink Reply by Peter J Kim on February 8, 2013 at 12:31pm

Last headline I heard was Wells Fargo now endorsing the program.

Thanks for sharing your experience Brian!

Permalink Reply by Kevin - Greenville, SC on February 9, 2013 at 10:22am
Permalink Reply by Peter J Kim on February 9, 2013 at 10:58am

Thanks Kevin. Interesting....

Personally, I do know if I approve of such a program. Leasing back to struggling homeowners at market rates?

I believe in downgrading and saving until they can purchase their next property in 2 years.

Thoughts?

Permalink Reply by Kevin - Greenville, SC on February 9, 2013 at 4:45pm

If they can afford the new payment I believe it's best to keep the Homeowner(s) in their Home vs. forcibly removing them and selling to someone else for the same (or less) price.

Permalink Reply by Heather Farquhar on February 10, 2013 at 6:15am

Here is a program overview:

  • Homeowners must work with a licensed agent who is trained and certified by the Short Sale Lease Back Program.
  • A qualified non-profit would purchase the home in a short sale.
  • The homeowner’s lenders must approve of the lease-back terms — the intent of the sale and tenancy cannot be hidden from the lien holders.
  • The seller would lease the home for a minimum of three years, allowing their credit to heal so that they could qualify for a mortgage.
  • Homeowners must attend ongoing HUD and financial-literacy counseling and speak with legal and tax experts to ensure the program is the right fit.
  • If approved, the former owner might be allowed to repurchase the home at the end of the lease term.
Permalink Reply by Erie Springer on February 10, 2013 at 6:37am

Thanks Heather

for anyone that wasn't familiar with some of basics, My understanding was non profit will be the buyer and pretty much sell it back to homeowner 

I've done one but homeowner backed out after getting  a pretty decent counter from the bank (select loan portfolio servicing)

I am working on another now (Citibank).  I think part of the challenge will be negotiating a price the non profit since it has to be affordable for all

Thanks again and great info

Permalink Reply by Barry Levy CDPE on February 13, 2013 at 12:05pm

Where do I go to get trained and certified?  How do you find non profits who will do this?

Barry Levy

RE/MAX/Allegiance

301-933-4252

[email protected]

Permalink Reply by Judi Fiolle on February 13, 2013 at 12:11pm

There is a shortsale conference from Mar 7th to the 9th in Las Vegas where you can get all of the information on this and I believe that you can get certified at the same time. go to www.shortsalecon.com for all of the details. Mike will be there too. It is going to be packed with all sorts of information on short sales and CDAT certification too. It is not expensive and there is no upselling either. 

Permalink Reply by Marvin Keith Jenkins Sr. on February 10, 2013 at 2:55am

Hi Peter and thanks for the info, this the first I have heard of this program. I am located in the Metro Detroit market area and this now sheds some light on a couple of things. Does anyone know of for how long will the home owner will be allowed to rent there on house?

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