Trying To Buy Mother's House

**lethlinjekshun** · 03-08-2010, 07:57 PM

Here's the situation:

My mother bought her house for $210K back in 2002. Due to financial hardship she has defaulted on her mortgage several times and has been through several loan modifications with the bank, and as a result she owes about $330K. She has tried to sell but the house just sits on the market due to the economy and the fact that the house is in need of work. We haven't had it appraised recently, but if I had to guess, I'd say it has a FMV or maybe $250K tops. But I can't see it going for any more than $200K. With that said, she will incur an enormous debt if and when the house is sold.

My goal is to obtain the house in the simplest way possible, and my question is what would be the best way of doing so?

I'm 27 and due to be married in September 2010. My income is insufficient because I am 1099'd and my AGI is around $20K for last year, and my fiance is W2'd with a pre-tax income of about $45K. Both of our FICO scores are around 630. By October 2010 we will have about $20K saved for a down payment.

I know this is a very complex situation, but I would like to figure something out not only for my own benefit of owning a home, but for my mother as well so she doesn't have to struggle with this.

So can anybody offer suggestions? I've heard everything from short selling the home (because we do have different last names), to arms length and non arms lenth transactions depending on whether the house would be in my name or my fiances, intra family transfers? What would be the most conventional way to go about doing this?

Thank you.

**mWoods** · 05-21-2010, 09:32 AM

Seems as if this would be more of an emotional investment for you and a means of helping your mother. This is not a sound financial investment. I would disclose to the lender your relationship with the seller to avoid any potential fraud should you decide to attempt to purchase the home. You mentioned that the home needs work. Factor this into your budget to be sure you can afford this property.

**Dave Reynolds** · 08-18-2011, 06:29 PM

This is a case in which I would seek the advice of a good bankruptcy attorney. Many people concieve of bankruptcy as an absolutely horrible worst case scenerio, when imo it's sometimes the most practical solution to a very difficult situation.

Your mother may be a perfect canidate for declaring bankruptcy, and it's probably worth at least exploring.

Bankruptcy is not the end of the world. It's a perfectly legal financial strategy that some of the wealthiest people in the world have taken advantage of at one point or another.