Posted by kazi on June 21, 2008 at 19:15:52:
JT,
This is my first time trying to rent/lease option a property, so this is all a learning process for me. I have asked her to bring copies of her bankruptcy papers with her tomorrow when we meet to collect her application form / fee. I will keep myself in the loop with the mortgage broker. Thanks for your advice.
kazi
Lease purchaser with discharged chapter 7 - Posted by kazi
Posted by kazi on June 20, 2008 at 21:39:19:
Today I showed one of my properties to a lease option candidate who revealed that she had filed for chapter 7 in November last year. It was discharged Feb this year. She seems to have a very stable employment history. Although she wanted to turn in an application for background/credit/rental history check etc, I told her to wait because I wanted to find out whether I should entertain a candidate like her. Please let me know if you think I could run into any trouble by leasing my property to her due to the bankruptcy although it already has been discharged. I appreciate your input/advice.
kazi
2 yrs from Discharge = new mtg loan - Posted by JT-IN
Posted by JT-IN on June 21, 2008 at 06:01:02:
kazi:
This is a perfect candidate for your L/O. She cannot obtain financing today, but should be able to within 2 yrs of discharge. She also cannot file another 7 on you, so there are merits to the situation.
She will need to re-establish positive credit history within the next couple of years, and if so she should be able to qualify for a new mtg 2 yrs after discharge. I would simply make sure that everything that she is telling you checks out to be true… and that her income now, possibly with a little growth over the next couple of years, will qualify her for the new mtg she will need in order to close in 2 yrs.
I also concern myself with why/how the Bk came about…? Is it purely consumer irresponsibility or was it due to uncontolled circumstances; medical bills, business failure, divorce or other…? If it is a pattern of poor mgmt then she will need to make some rather difficult changes in mentality to avoid repeating such a pattern. People really don’t change…
All in all, folks like this are your best candidates as long as she is income qualified. She wants homeownership today, but can’t otherwise accomplish this… You want ownership mentlity today and will only accomplish this with someone that can’t quite get there on their own; therein you become the catalyst. Sounds like the frame work of a Win/Win deal.
Good luck. JT-IN
Re: 2 yrs from Discharge = new mtg loan - Posted by kazi
Posted by kazi on June 21, 2008 at 06:28:18:
Thank you so much! This was exactly the information I was looking for. 
What she has told me so far is that she went through a divorce causing her the financial trouble. Now she is working with a mortgage broker who told her that she could qualify for a loan in March, 2010. As far as employement goes, she has been with the same place for the last 10 years. Hopefully she makes enough to qualify. I will verify all the information.
Kazi
Re: 2 yrs from Discharge = new mtg loan - Posted by JT-IN
Posted by JT-IN on June 21, 2008 at 07:46:38:
kazi:
What I like to do in situations like this is to be “in the loop” with the mtg broker process. Since she is already working with one it may be more difficult to do it that way… Anyway, I like to KNOW the income amount, any current expenses, etc; in other words, do my own pre-qual… I really don’t like to rely on someone who is wanting to Lease my home, and exactly what they are telling you as gospel… Sometimes the facts don’t equal the tale as told… but that is just me. I would certainly at the very least have her authorize the mtg broker to openly discuss her qualifications with you… so there are no surprises in a couple of years.
Also I like to look at the Bk docs and file… This might be difficult to do if you don’t subscribe to Pacer (online fed’l court docs). It is easy to inspect the docs, see what was listed as creditors, current employer, income, etc… This way you can know whether you are being told straight or not… To me, honest and straight communication counts for a lot. It I have an applicant that is telling me what I want to hear, and the Bk case doesn’t mimic that story, then they are TOAST. I call these people “Dancers”. They will dance all the way arond the truth, but never tell the truth. These folks never lead you where you want to end up… and I would rather avoid being the one left on the dance floor, and knowing all the facts up front will avoid the sad tales later… But it takes a while to get to the point of being quite so straight forward with these folks, but it certainly saves a lot of pain later.
Good luck on it… JT-IN