Will there be a Re-Emergence of Private banking as a result of the Tightening Lending Milieu?
Many years ago, when Jeff’s Grandfather (bless his soul) was a business owner in Muncie, IN during tough economic times, banks were not giving out many loans.
…So, rather than go out of business….
HE became a private banker and carried the note for some of his customers (i.e. set up the terms &; conditions for re-payment at a certain interest rate over a certain period of time).
Recently, we closed on another Land Contract in which the seller, who owned their home outright, became the BANK for the Buyers!
....By the way… it is estimated (2008 Data) that …“However, 40 percent of households do not have a mortgage on their home.”
If this is so….Private Banking may Re- emerge again, in times like these!
The process of doing a Land Contract Sale was very involved and much advance due diligence occurred (each side 
having attorney representation). The results were, in this case, a win-win situation for all parties involved.
With the banking industry loaning less and even HUD thinking about making FHA requirements tighter, Private Banking to facilitate Real Estate Sales by the Use of Land Contracts or Lease/Purchase Agreements is certainly a viable option for some sellers these days!
As we’ve said before “Cash is King “in Real estate sales these days, because there are less glitches to run into in the lending process without appraisals or underwriting conditions or lenders!
Can the re- emergence of Private banking be the next best thing to cash sales?
Time will tell.
It’s an option we are discussing with our sellers to investigate further, if they are in a position to carry their own papers like Jeff’s Grandpa did many moons ago.
Thanks for stopping by and reading our Blog about Life in NW Indiana, The Housing Market, Communities, Local Sports, Events, attractions & more @ NorthWestIndianaRealEstateBlog.com
Sincerely,
Jeff & Grace Safrin, Broker / Owners
F.C.Tucker 1st Team Real Estate - Independently Owned & Operated
13 Lincolnway Suite # 203, Valparaiso, IN 46383 Office # 219-309-9930
