[lendaddy]

A buddy of mine is getting involved in the following and to me it sounds like a scam. You tell me.

Person A is about to be foreclosed on (their home). Their credit sucks and they cannot refi or pull the substantial equity in their home as they do not cash flow for a loan of any type in their own name.

Person B takes out a loan for Person B's home plus ten grand out of equity (up front gift to person B for their service), plus two years payments (put in escrow to cover the payments).

Person A must pay 10-20% of the payments (say $200 a month on a $1200 payment) on time every month for those two years or they default and Person B assumes their home.

Person A (after successfull completion of two years payments on time) must pay off Person B in full (via cash or another loan) or Person B assumes their home.


In this case it is worth $240k and he is taking out a loan for the $115k Person B owes. So in the end he may assume ownership of a $240k asset for $115k, and worst case he gets $10k for his trouble when they pay him off.

Is this for real or a scam? (I realize it's not a good deal for person B)