I met with John this morning and he wanted to know, when he could buy a home. He had a short sale in October of 2011. His saga started in 2006, when he was speaking to a loan officer about doing a joint venture. However there was no joint venture, when there were problems.
Not sure exactly how this property was chosen, a three family that needed work. The property was going to be in John’s name only. There was a 1st mortgage of $192,000 and 2nd mortgage of $48,000. You do not want to know what the interest rates were. Here's the deal, the property was going to be renovated and then flipped. All this was going to take three months and they were going to split the profit.
Not sure who estimated the cost of the renovations, but he told me, it was supposed to be $10,000 per unit. John had no renovation experience and over the next three years spent $75,000 out of pocket to renovate the property.
During the three years, the loan officer disappeared and all of this was all on John. Do you have any idea, what the value of this property was after all the work was completed? In 2009 the appraisal came in at $150,000. He stopped making the payments and eventually the property was sold for $110,000.
I told John, based on the loan products today he was eligible to purchase a home October 2014. I have heard these stories too many times. All I could do was to apologize to John for being victimized by a loan officer that should be in jail.
