Posted by jonah on November 12, 2004 at 20:19:01:
Would licensing be required in Florida - or maybe there is a national regulation?
I’d appreciate guidance on this. I would like to offer loans to homeowners in preforeclosure, to pay their back payments and fees and to bring their mortgages current. I would protect myself by holding a second mortgage. In this way, the homeowner could remain in the house. I would probably have the homeowner pay both mortgage payments to me and I would pay the lender of the first mortgage.
I would only do this if there was at least a moderate amount of equity in the house and if the homeowner’s financial picture had improved, but he still needed help in paying the back payments and the fees. But if he got that help, he could begin again paying his monthly mortgage. And maybe I’d have the agreement with the homeowner include an option for me to buy the property several years down the road, at a price to be set now.
Am I putting myself at great financial risk? Is this a foolhardy way to handle preforeclosures? I know I can always offer to take over the loan subject to, and give the homeowner some cash, but I know that the majority of distressed homeowners would be grateful to not have to move.
And does it seem as if lending money like this to a homeowner and writing a 2nd mortgage would require any kind of licensing?
Is there a better way to help a homeowner in distress?