What Is “Buy and Bail?”

When people cannot sell their house, they will buy another house with a temporary lease or a paper lease on their existing home, buy another home that they can afford the payments and maintenance, and then let their current home go back to the Bank as a foreclosure. We just had a couple come in from Michigan that they were losing so much on their house there, they just wanted to see if they could qualify for a home here and then let that one go to Foreclosure. This is a NO, NO! Lenders and FHA are really looking at possible leases on homes when someone is buying another. It won’t work anymore!

What are the affects of letting your house go back to the Bank? You won’t be able to buy with the following types of financial problems:

• Chapter 13 Bankruptcy - would require 2 years from Discharge date or 4 years from Dismissal date (uncompleted Bankruptcy)

• Chapter 7 Bankrupty – 4 years from Discharge or Dismissal date

• Foreclosures – 5 years from completion date with a 10% down payment and a 680 FICO score at least

• Pre-Foreclosures (short sales) – 2 year period from completion date (NO exceptions regardless of extenuating circumstances)