Any help would be appreciated

[FSchramm]

I am currently living in a house that is owned by my father. He purchased this house three years ago, and we moved in. He is currently in a 2 Yr Arm that has already adjusted once. It is getting ready to adjust again and it will be too much. There is also a second loan on the house as this is a 80/20 loan. We feel like there was deception in the process of buying this house because the realtor never gave a disclosure form, he had friends that worked on getting this loan approved, when in reality it probably should not have been approved.
Now we are trying to keep up the loan but it will not be possible when it adjust the next time. We have thought about a short sale but can not get a good answer on the results on your credit. I understand that a foreclosure will be worse, but we are trying to do what we can. If we try to do the short sale I can buy the house from him. Can anyone give advice on what we can do?

[mreedlaw]

Good evening...I would highly recommend checking out the Homeowner's toolbox section of this forum located on the left side of you screen - a good place to start is "Ways to Stop Foreclosure" - also, do believe that your Father may have been victim of predatory lending or mortgage fraud - do you have examples of "irregularities" - for example, a difference in the good faither estimate vs. the actual interest rate - was there a great disparity in a YSP (Yield Spread premium), etc.?

[Moe Bedard]

Hi FSchramm,
Thanks for joining our forum and Welcome to you......
Some more info about the situation would be helpful.....
What state are you in, what is the loan amounts on both loans, who is the lender on each, what was the initial interest rate, does your dad still live in the property with you......

In answer to one of your inquiries you would not be able to purchase the property from your dad after a short sale has been agreed to or a modification has been sought after because it would be considered a Bail Out......
Poppy would be able to elaborate better than me on this......
Please answer.......so we can look at the situation better.....
Thanks

[FSchramm]

I am not sure because my parents have all of the paperwork. We are going to start going through it all. The reason I feel like there was something wrong was because when we purchased the home the pool was full of black algae. I called the real estate agent and asked him why this was never disclosed, he sadi that we never did the disclosure. I explained to him that I was going to call his broker and let him know the issues we had and have a lawyer go through the paperwork. He was very nervous and called my parents telling them that he may lose his license if I continue probing. At one point he even offered to buy back the house but we had already moved and were not interested in that offer as we had already moved.

[FSchramm]

1st Loan is Aurora Loan Service for $250000 (Started at 6.5 Currently 8.5 adjusting to 10.5 followed by 12%)
2nd Loan is CitiMortgage for $50000 (Currently 8.5 fixed)

We are Arizona

My dad has never lived in the house and in fact has another. The real estate person was aware and said this was approved.

[Moe Bedard]

At this point it would be wise for you to hire an attorney......it could be a possibility that this loan was misrepresented as being an owner occupied loan and not an investment property loan which could potentially open up a whole other can of worms.......
I can't give you legal advice as I am not an attorney, however, I do feel that you have a case to be looked into futher.......
what your dad can do is write a QWR which is a Qualified Written Request so he can get the original paperwork from the application and loan information for an attorney to check for violations.....

Here is a good example...

My Countrywide escapade and Hi!

Thank you for joining the forum and telling your story.

*** is correct this is a NAL or Non Arms Length transaction, not real doable these days and the Lenders are not approving them and the investors are not buying them. It is also an end run around the Lender of record and would be severely frowned upon. They would not be happy, you are living in the house that you father bought and got the loan for.....was it represented as an owner occupied property for your father when it was purchased and did you father ever live in it? Serious problem. Not good. Represented as owner occupied by the borrower and the borrower never lived in it.

So...modification with your father's assistance is a route that you could choose or the Short Sale if the lender will agree to it, however they may want your father to sign a note for the short amount and pay it back. Short sale does not ding your credit significantly, it will modify the trade line with something like "creditor settled for less than amount owed". Other than that the affect/effect to score is little.

The pool at the time of purchase is a realty issue, we only care about the fence around the pool in the Phoenix area due to health and safety issues if it is required in that community, like Fountain Hills - they have a code that requires fences around pools and spas. The quality of the pool water is not a lender concern, however if the pool was empty at the time of purchase we would have made it be full, another health and safety issue no matter where your are.

The problem as I see it was that the representation of occupancy was naughty, and as such puts a damper on a lot of issues. ALS - Aurora has a lot of these loans, a whole raft. They are fairly strict in their behavior towards these issues, and if the Realtor said it was OK, that again is a realty issue, however if the Broker condoned and purported that property to be owner occupied and knew other wise, the State Banking Commission of AZ would be very mad. So as *** said retain an attorney and if you were not complicit in the representation of the property as an owner occupied property and had no idea that this was wrong, then report the Broker to the State Banking Commission of AZ, they are investigating these issues aggressively and taking them seriously.

*** this was a 2/28 ALS Money Maker Loan (trade name that I underwrote to), still have the guidelines - FICO went down to 580 I think at one time for an 80/20 Combo. Phoenix sold the heck out of them.