"Boater" wrote in message
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moneybox
The Subprime Good Guys
These mortgage lenders loan to poor people, strengthen communities, and
are still making a profit. How do they do it?
By Daniel Gross
Posted Saturday, Nov. 15, 2008, at 7:42 AM ET



There are other ways too.

We are in the process of finalizing the sale of our old "Farmhouse" (the
one my mother lived in until recently).

The buyers are a young couple who Mrs.E. met through her horse activities.
They are great, hard working people in their early 30's who have been living
in an apartment, trying to save up to buy a house.

Long story short, we are selling them the old Farmhouse for $300K which is
$65K less than what we paid for it 7-8 years ago. But, we are being the
"bank", holding the mortgage. We backed into the agreed price by first
determining what they could comfortably afford in terms of monthly payments,
including taxes, insurance, utilities, etc.

It sounds crazy, but it works out fine for them and for us. The interest we
will earn (6%) over the 30 year mortgage term more than covers the "loss" of
65K plus any future appreciation of the house value.
We have a penalty clause for early payoff to protect us that will guaranty
at least $400k net to us.
They don't have to come up with a downpayment .... I'd rather they keep
their savings as emergency funds ... nor do they have to pay finance fees,
or mortgage insurance fees to a bank.

Other than that, it's exactly like they went to a bank and got a mortgage.
They can sell it, refinance it, do whatever they want.

When I called our accountant recently (also a "financial planner" who's
services we've never used) to set up the paperwork, he started to comment
that we'd be better off selling it outright, take the proceeds and invest it
..... and then he stopped and chuckled. He acknowledged that the current
economic climate was probably not in his favor to convince me to allow him
to invest our money.

Anyway, this is the second time we have done this with property we bought a
while back. The first one, done about 5 years ago has worked out perfectly
for both the buyers and us. Adding this one provides additional income for
us in our retirement years as well as affords home ownership to a young
couple who otherwise would have a hard time getting a bank mortgage in this
day and age. And *we* make the interest, not a bank.

They are all excited and it's fun to witness:

http://stevenmcnally.net/

Eisboch