[Coldjensens]

Originally Posted by magellan

It's not the builder who arranges the lease of up to 6 years, it's an intermediary company he/she mentions, called Marketplace Homes.

Ok. Then you lose when Marketplace Homes goes out of business. Whether theya re a builder, or an intermediary, you still lose your dealw hen they go out of business. The bottom line is that they are taking money from you up front oin exchange for a promise to do something tomorrow and if they do not do what they promise tomorrow, you are out of luck and paying on both houses, both of which will now be under water.

[michiganbob]

I agree with the other posters: something about this does not sound right. Sounds like the kind of deals they make on cars when you are upside down on your loan: they fold the old loan into the new loan. So instead of being upside down $5000 on your 3-year-old car, you are now $10,000 in the hole on a brand new car (as soon as you drive off the lot.)

Yes, you have a brand new car, but your debt--and risk--is now double what it was. You think you're free, but instead you are deeper in debt. Wreck that new car and your insurance company will only pay what it is worth and you have to come up with the rest. Likely the new home will actually be worth less than what you pay for it as they are taking the debt and the risk on your existing place and folding it into that. How else does this work for them?

These people are not stupid and are not going to build a new home at a loss just to keep busy. They do, unfortunately, have a reputation of making deals that end in foreclosure for someone else. Not all builders are evil people, but they are in the business to build and sell houses. Those that invested heavily in land that they now can't sell are doing everything they can to get rid of it by building anything for anyone at--what seems like--any price.

As the said in the movie "Run, Forrest, run!"

[magellan]

Originally Posted by Coldjensens

Ok. Then you lose when Marketplace Homes goes out of business. Whether theya re a builder, or an intermediary, you still lose your dealw hen they go out of business. The bottom line is that they are taking money from you up front oin exchange for a promise to do something tomorrow and if they do not do what they promise tomorrow, you are out of luck and paying on both houses, both of which will now be under water.

Exactly. I was just clarifying.

[magellan]

Originally Posted by michiganbob

I agree with the other posters: something about this does not sound right. Sounds like the kind of deals they make on cars when you are upside down on your loan: they fold the old loan into the new loan. So instead of being upside down $5000 on your 3-year-old car, you are now $10,000 in the hole on a brand new car (as soon as you drive off the lot.)

Yes, you have a brand new car, but your debt--and risk--is now double what it was. You think you're free, but instead you are deeper in debt. Wreck that new car and your insurance company will only pay what it is worth and you have to come up with the rest. Likely the new home will actually be worth less than what you pay for it as they are taking the debt and the risk on your existing place and folding it into that. How else does this work for them?

These people are not stupid and are not going to build a new home at a loss just to keep busy. They do, unfortunately, have a reputation of making deals that end in foreclosure for someone else. Not all builders are evil people, but they are in the business to build and sell houses. Those that invested heavily in land that they now can't sell are doing everything they can to get rid of it by building anything for anyone at--what seems like--any price.

As the said in the movie "Run, Forrest, run!"

After getting out of the industry back in 06, I'm amazed that they're still trying all of these funny money "creative" ways to move houses and land. Unbelievable.

Mom was right: "If it sounds too good to be true, it is!"

[cexelby]

Originally Posted by nervous_buyer

Well, a couple of reasons. Primary is that we are way under water on our current home. In order to get around that without ruining our credit, I am looking at working with Marketplace Homes. They will rent our home out for 6 years and deal with all of the rental hassles. If they don't have a renter, they still pay us rent. That offers a lot of security vs. trying to rent out on our own with no experience. However one of the stipulations is that you purchase through one of their approved builders. Part of the way they make money is from a commission on putting us in touch with their builder.

The other reason is that my wife is very focused on being able to pick out her options, etc.
However I assumed that the builders still have to work in the same market. The house has to appraise in the end.

what happens when Marketplace goes under?