Option #4: Work with an Investor

There are good-hearted investors, and there are greedy investors. Finding the wrong investor will mean losing your home & all your equity with nothing to show for it but being free of the loans. (And even the greedy ones won’t look at your home for a minute it you owe more on it than what it’s worth.) Finding a good-hearted one, however, is another matter altogether.

Many private investors out there do want to create a win-win situation for both you and them, where you are free of your debts, and they can create a fair amount of money for themselves out of your equity. Again, if you have no equity, there is nothing they can do for you. Also, this doesn’t address your credit situation at all, so you’re very likely to be stuck with terrible credit for the next decade anyway… At least your neighbors won’t have to know about any of this!

The main problem, of course, is being able to tell if the investor has a good heart or is ill-intentioned. It can be so hard to know people’s motives in this day and age.  

Pros: 

Assuming you find a ‘Saintly’ private investor, then you can sell your home quickly and easily before foreclosure and get this whole thing behind you quietly. There will also be no realtor fees or anything extra, you should easily see where all the money is flowing. Finally, you’ll have a month or two at least without any house payments as the investor will be paying those for you.

Cons:

If you choose the wrong investor, it can be messy, loud, expensive and slow. A very ill-natured investor could throw you out on the street with nothing to show for it, but that is probably a rare case. No matter what kind you find, your credit report will keep all of the bad information intact, so buying another home will be next to impossible for 5 to 10 years. And naturally, you’ll lose most or all of your equity.

This may not be an option for you if you’ve waited until the last day, the investor has to have the time to get his funds in order to close on your house. (Three or four weeks before the auction should do it though.)

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