[Porsche-O-Phile]

I'm doing some research into these kinds of "rent to own" deals since they seem to be becoming more common out here and might represent a nice alternative to coughing up tens of thousands of dollars up front for a down payment with a bank. Admittedly though, I know very little about these, the specific terms and associated risks, so I'll consult the Pelican Brain Trust first and do a little more research.

Here's what I've been able to piece together (feel free to confirm, expand upon, correct or utterly refute my beliefs to date):

- It sounds like (mostly) these things involve an existing owner who is either gambling with their title to make money off of either (1) the renter/prospective buyer defaulting on the terms somehow or (2) deciding not to exercise his purchase option at the end of the contract term, OR one who is in deep schit on their monthly payments (becoming more and more common with ARM resets).

- Do the current owners typically make arrangements with their banks/lenders to transfer title upon completion of the contract term if the renter/prospective buyer decides to "execute the option", or is he/she on their own with respect to securing their own separate, new loan/mortgage through their own lender (possibly having to cough up ANOTHER down payment, this one for the mortgage writer)?

- Is there typically any claim on title or right to title as a renter/prospective buyer in this type of arrangement?

- If you're living there and the owner either pockets the money and defaults (going into foreclosure) or otherwise goes into foreclosure with his lender, do you have any recourse (i.e. right to rehabilitate the loan and seize title)?

Obviously I'd check with an attorney before proceeding on anything and a lot of the specifics might be case-by-case, but I just want to get a general feel for what you more experienced guys think about this. As a person who is looking to buy eventually (but not right away) this might be an awfully nice hedge position if the specifics don't make it too terribly risky or don't put me over a barrel. Certainly might be simpler/easier than dealing with the morass of banks, lenders, tight credit, day-by-day standards, high down payment requirements and people looking to screw buyers over until things settle down a bit in any case. . .

Thanks in advance for any info.