Question from Kim:
Unfortunately, my fiance and I have been part of a lease option scam and we would like to know what to do. We have signed a lease option agreement a year ago for $84,900.00 with monthly payments of $920.00 with $100.00 going toward the option every month. However, since we are both in the Mortgage industry we decided to do our own title search before applying for a Mortgage and found out that the seller on our contract also has a lease option with the original owners.
Unfortunately, our seller did not assign the lease option that he has with the original sellers/owners. He has given us a completely new lease option that does not have the original owners/sellers on it. Therefore, we can not obtain a Mortgage with the contract that we have because our seller never owned the property. What type of advice would you give us in this matter?
Answer By William Bronchick:
This is referred to as a "sandwich" lease/option, and is not a scam at all. So long as the person selling to you has an option to buy, he can offer you an option to buy. He will close with the owner before closing with you. I have done this many times. The fact that title is not in the seller's name at this point is irrelevant. So long as title is in your name at the time you obtain your mortgage, you can go ahead and get your loan.
Disclaimer: The foregoing is not intended to be given as legal, financial or tax advice, but intended for instructional use only. If you require legal, financial or tax advice you should seek the assistance of a qualified professional.
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