A New Pespective on Bond for Deed from Mortgage Lenders
A funny thing happened on the way to the government bailout of the "too big to fail" mortgage lenders. As it happens, lenders with whom we have spoken of late have once again realized that having a secondary source of repayment (and foreclosure and liquidation should never be considered a source of repayment) is a good thing. Consequently, a home with a BFD contract on it is not a negative but in fact a positive in that two parties (the BFD buyer and seller) have a vested interest in seeing that the mortgage is paid on time and in full. Recently we have heard from both national and local lenders that the idea of a secondary source of repayment through a BFD actually enhanced the credit, particularly if their borrower was struggling to make payments. Who knew? Back in the day this was a basic tenet of prudent lending - like your parents guaranteeing your first car loan. Looks like we may be finally coming full circle in mortgage lending. We can only hope.