buying a home from a lender

rh71

No Lifer
Aug 28, 2001
52,853
1,048
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Brother in SD considering buying a home from a lending company (Countrywide Financial) who has had a history of giving out bad loans. We're concerned because the company's stock has taken a tumble as a result and they may even file chapter 11. My brother has good credit and can put down 20%. But if we were to buy a home from them, what would be our concerns for the future given the state of that company?
 

TheTony

Golden Member
Jun 23, 2005
1,418
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Why would it matter, unless you're taking out a mortgage from the same lender you're buying the property from? Once the sale is complete, assuming you're not borrowing from them, their future is not relevant.

Be aware of what kind of foreclosure agreement you sign. Despite getting a reputation as an inexpensive way to get into a home, they're not all as good a deal as they might seem, especially if the purchase agreement carries stipulations (such as assumed obligations from the existing debt on the house).
 

rh71

No Lifer
Aug 28, 2001
52,853
1,048
126
Another question - I've heard that CA sales means no closing costs compared to other states. But a few searches say otherwise. Details?
 

BoomerD

No Lifer
Feb 26, 2006
62,843
11,255
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Countrywide (and other lenderrs) may eat the closing costs, but otherwise, folks in Kahleeforneeya pay closing costs just like they do anywhere else.

BTW, buying the home from Countrywide and having them mortgage is wouldn't be terrible. Even if they fold, your mortgage will just be sold to another mortgage company....that happens all the time. Your contract won't be affected, only who you pay might change.