I had a phone call the other day from a former client.
It was another call for help, I had placed a Hard Money Loan for her a year ago.
She had first contacted me when her lender filed a Notice of Default on her home.
She was working but fell behind in her payments.
- Her income was minimal.
- Her job was part time temporary.
- Her credit completely trashed.
- She had absolutely no savings in the bank.
- The Trustee Sale was coming up quick.
She was in a bad position!
I setup a Hard Money Loan. It was her only option. No traditional lender would touch her. Remember this was before the collapse of the Sub Prime Lenders!
I didn't just stop there.
I made sure I also negotiated enough cash out to pay for her mortgage payments for a year.
I put that money into a savings account in her name.
The plan was simple.
Make 12 regular monthly payments on time and in a year we can get you into a better loan.
In the meantime, I also dispensed some other un - loan officerish advice.
She needed to get a better job. Preferably something Full Time, Better Pay, and with Health Benefits. Her spending patterns were not outlandish. But she did have a live in boyfriend at the time. Why didn't he help pay the mortgage? He was a self described slacker! No Job, No Money. You know the type. You can also guess what my advice was concerning him.
It turns out she didn't follow my advice. She spent the money in her savings on other things. She fell behind again. That was 6 months ago. Her solution that time was to have her Father (who lives close by, is retired, and had plenty of equity in his own property) buy the home from her, finance it with his good credit and she would make the payments. I was not aware of this. She didn't call me this time. Legal issues aside, her Father solved her problem.
That is until she fell behind again!
She was layed off from her part time job.
She fell behind again.
Her "Fathers Lender" filed a Notice of Default on the house she was living in.
That's why she called me. She was looking for a Hard Money Loan to bail out her Dad.
I had a long talk with her. I discovered the details, the facts, and the story.
My advice was simple and straight forward.
I would NOT do this loan.
I refused to do another loan!
She had ruined her credit, and now she had ruined her fathers credit.
It was a Train Wreck and only going to get worse.
I nicely, but firmly, told her to sell the house (if she could).
If she couldn't, it was going to go to auction and she would be out.
Trying to salvage anything out of this would be irresponsible!
I see all kinds of people as a loan officer.
This woman is a nice person, she's an honest person. She's not trying to use the system. She's not scamming lenders or loan officers.
But it all boils down to this.
Some people should NOT own houses.
Many people should.
But some people are not cut out to handle the financial responsibility of owning a home.
Plain and simple.
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