BiggerPockets

to someone here, but i don't know how to proceed. I have a borrower who owns her home except a 10k HELOC she borrowed, she is now in danger of losing her 200k home to a 10k HELOC. Her credit is too bad to refi with any banks, but she is wanting to borrow 25k, 10k to pay off the HELOC and 15k for herself. There is only a 10k lien on this house that was appraised this month by the credit union for 191k (these banks always give low appraisals). Since she cannot qualify for a loan, how could an investor step in and lend her the money and use the house to insure the loan? What paper work is needed to make this happen?

The way I see it is either she make the payments on time and the investor earns interest or she defaults and the investor gains the property. If she's having trouble making payments on the 10k loan, chances are she will probably have trouble paying back the 25k loan also. What do you guys think?

What type of property would she get that's cheaper than a 10k HELOC monthly payment? She has no mortgage on this property. How could an investor move forward in order to put himself as first lien holder? As a mortgage broker I thought of every possible way to help her, but her credit history is just too bad and she's not old enough to qualify for a reverse mortgage, so I don't know how else to help her.

I'm a lil confused about your comment. Are you suggesting that all money investors have bad intentions when they lend on a property? The borrower came to me because she wants to borrow money, I don't think she has no desire to sell her home or she would have called a realtor. Yes I assume she will probably have trouble making the payments if she can't make her current payments, but rather I help her or not she will still seek assistance on borrowing money.

Let's look at the situation objectively:

She has lousy credit or no income.
She can't make a 300-400 payment on a 10000 loan
If she defaults on the loan she loses her house
If she loses her house she loses everything and has no money to pay even rent
If somebody loans her more money she will most likely just be foreclosed later

So now who would want this "investment"? The likelihood of foreclosure is obvious to all. My personal opinion is that the only person willing to loan her money is either providing charity to somebody who has $180k but doesn't want to be uncomfortable (not terribly likely) or somebody who would like to foreclose on the house if the opportunity presents itself. I don't think that's the type of person you want this person working with.

She has all the tools to get herself out of this mess if she sells the house or gets a 2nd job. A loan only makes things worse.

This Lady is obviously unable to make a rational business decision, but I personally would advise her to sell and move on with some cash or lose it all to some unethical lender. If she persists, she will just have to live with the consequences, but it won't be on my conscience

Lenny, the best way to help this person is to point out the dangers of unethical lenders.A new loan is the last thing she needs. she could work one day a week and easily cover this payment. She needs to learn to live within her means. Her pursuit of a new loan is a 100% probability that she will have the heartache of losing her home in the near future in my opinion. Jim

Here is my take on this.

She needs to borrow the money from a friend or family member.

She also could get a roomate and let them make the payments for her.

Go to a charitable organization like her church and they might be able to help her out under the NON PROFIT hat.

I personally like the roomate situation. See there are others out there who are struggling and could afford to pay $300-$400 a month.

In times like these we have to learn to be CREATIVE.

Man if she is getting $1500 a month why in God's green earth is she having a hard time paying $167 a month with no bills and no mortgage payments..

Sounds like she is either on drugs or isn't taking any responsibilities whats so ever.

And she has the gaul to ask for another loan and for $15,000 for herself man she must not be mentally stable.