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Howard Ain, Troubleshooter: Land Contract Warning

Updated: Wednesday, November 27 2013, 04:33 PM EST




CINCINNATI (Howard Ain) -- Trying to get a home mortgage these days can be very
difficult. Requirements have become pretty strict. So many trying to buy a house
are turning to land contracts, but as Local 12 Troubleshooter Howard Ain shows
us, you need to be careful before you rush into such a deal.

Cynthia
Buchanan bought a house in Williamsburg on a land contract back in 2003. I first
brought you her story last year and now there are new developments.

"We
went to a lawyer. We used the same lawyer. We filed it through the recorder's
office in Brown County and I thought everything was legit and legal," says
Buchanan.

According to the land contract, even though Buchanan didn't
take title to the property, she was required to pay the property taxes. In
addition, she's responsible for all maintenance and repairs, so she re-did the
floors, and put in new drywall and molding. Buchanan was in the process of
re-doing the kitchen here, when she got notice that there was a problem with the
mortgage and that's when she stopped making improvements to this house. Turns
out the house was going in foreclosure because the owners stopped paying on the
mortgage, even though Buchanan was paying those owners.

"They continued
to pay the payments until apparently in 2009, and then a foreclosure notice was
delivered that they had not been paying the payment," says Buchanan. The bank
bought the house last month at a sheriff's sale and now Buchanan is preparing to
leave.

"I got most of my stuff in storage, but I hope to get in touch
with the bank. I hope they'll return my call because I really would like to stay
here cause I have a lot of work in this place," says Buchanan.

"I didn't
think it wasn't my house. That's where I made the mistake," says
Buchanan.

So, I contacted JP Morgan Chase Bank and now they will speak
with Buchanan about her possible purchase of the house.

So how can you
protect yourself if you want to sign a land contract?

First, hire your
own lawyer. Next, as Buchanan learned, you should not be making repairs and
improvements to a house you don't own. It's important that you get the mortgage
company to agree in writing to alert you to any default and to give you the
right to make payments on the mortgage, so you can keep the property. Without
all that you have no rights and as Buchanan found, you can be evicted and
everything you paid would just be considered rent.
Howard Ain, Troubleshooter: Land Contract Warning


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