Mortgage Bankers Step Aside -Welcome the New Bank of Seller Financing -Rent to Own!

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There is little doubt the U.S. economy is faltering and taking residential real estate with it. Almost daily news headlines announce more doom and gloom for the nations housing woes. And it is not  just troubles in housing but mortgage lenders are taking a hit. Mortgage approvals are way off as the banking industry cautiously wades in unchartered waters all the while homebuilders are left suffering from the fallout. Builders such as Centex Corp., Pulte Homes Inc. and Hovnanian Enterprises Inc. are walking on eggshells with acres of unsold properties - not for lack of consumer demand but from lenders restrictions on loan aprovals.

The real estate liquidity problem is further exacerbated by the bank failures in the mortgage sector. In 2008 alone there were 25 F.D.I.C-insured banks in receivership, including mortgage giant Washington Mutual. The number of bank failures is 8x greater than in 2007 (3) and 25x greater than 2006 and 2005 (zero).  THe failures weigh on the collective psyche of borroweres and lenders as caution is the word of the day. Mortgage lending is by no means completely dead in the water, but the loan approval
rocess has tightened considerably, expecilly compared to the glory days of the past.

For home sellers and home buyers it is quite clear for the time being traditional sources of mortgage loans are limited and cannot be relied upon. Despite this challenge the demand for home ownership is strong. One of the answers to closing sales is seller financing - the lender of last resort is the homeowner himself.  The home owner has the opportunity to sell his real estate with seller financing, also known as rent to own home ownership.

When it comes to seller financing the terms used in the industry are rent-to-own, lease-to-buy, rent with option, lease with option, seller carry back, wrap around mortgage, land contract, and a basic rent credit used towards a down payment.



Comments (4)

Everard Korthals
---Preferred Lifestyle Advisors--- - Lancaster, PA
Mountain Realty

We would encourage you to read the Active Rain Guidelines and Terms of Service. before proceeding. If you were to have any questions, refer to the Help/Faq group. All the best- 

Feb 09, 2009 11:21 PM
Sasha Miletic - Windsor Real Estate
RE/MAX Preferred Realty Ltd. - Windsor, ON

Hi Marilyn, Welcome to AR, Be a Blogholic and start writing your own blog soon on AR. All the best for your RE business. This is the right place for customers, friends, realtionships etc.

Best - Sash

Feb 09, 2009 11:28 PM
David Painter
Keller Williams Realty - Spartanburg, SC

Good to have you on Active Rain.  This is a good site for gathering information and interesting to see what others are blogging about. Contact us if we can be of service to you. We would be happy to send you a referral or to take good care of any referral you would send to us.

Feb 10, 2009 12:45 PM
Marilyn Esso of



Thanks for the comments. We do have many buyer leads. In fact we are bogged down and unable to service them as timely as we should.  We now have 26 states online and daily receive many buyer registrations, including newsletter requests and questions. Many of the registrants have good credit and hefty down payments and ask for information on obtaining a rto buyer consultant , a job for the pro. For that reason we are looking for experienced rto realtors. FSBO and RTO seem to work better with a pro in the mix. Do you have any suggestions? We are open to ideas.

I might add that realtyrto is not necessarily about rent to own homes (listings.) We actually focus on the buyer. We feel the real estate industry doesn't have a shortage of real estate listing sites -but a dearth of sites that cater to the buyer -and it is working. Buyers are signing up in record numbers.

The partners at Realtyrto are very experienced in the industry and had bought and sold hundreds of homes in the "We Buy Houses" mania. Now that the financing has dried up and many homeowners are losing homes in record numbers they will be challenged to buy again on credit, in the near term anyway. Rent to own concepts will fill the gap.

Feb 10, 2009 01:41 PM