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Unique Situation re: Annuity Income
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Posted 1/4/2009 5:13 PM (#1911)
Subject: Unique Situation re: Annuity Income
Hi. I have a unique situation and will be as brief as possible.

My son receives structured settlement monthly annuity payments with lumps sums given appx. every 3 years. His monthly income for life is 96,000 a year. The lumps sums are a considerable amount. Because the structured settlements are due to a traumatic injury he is not taxed on the income.

I wanted him to learn to live on his own so when he turned 18 in May of 2004 he purchased a condo. He had no credit, no debt, but a large guaranteed income. He got an FHA loan. He had a co-signer for the loan because he had no established credit and this prevented him from paying a higher interest rate. In March of 2005 he was able to refinance and get the loan under his name only. He owned this condo from May of 2004 until August of 2006.

Katrina hit August 29, 2005. His condo didn't flood, but all of the credit he established was erased. Most mortgage companies did this as an act of kindness. Unlike my son everyone else, because of the hurricane, was unable to pay their bills. Life was put on hold for at least 6 months and those were the lucky ones. The mortgage companies erased credit histories because it would have devasted most people.

So....the co-signer portion of the loan didn't count and the only thing that shows up on his credit report is his loan payment from 3/2005 until 8/2005. I called and asked them if they could put it back out there and apparently they couldn't.

After my son sold his condo in August of 2006 he rented. One home he rented from 4/2006 thru 4/2008 for 1700.00 a month. His current home he paid the first month's rent on 4/2008 and will end his lease on 4/2009 in the amount of 1900.00 a month.

Everything has been insane and uncertain around here for years, but it is time for him to buy a home. There are now large homes in gated communities with golf courses and navigable waterfronts in non-flooded areas with an average of 2300 sqft. They are luxurious with all state of the art extras. Due to both the market situation as well as the hurricane many of these homes are selling between the 250's and 280's. Most of the big businesses didn't rebuild after the hurricane and their employees, oil and military included, were transferred.

Now that you have the background info here is what I need to know. I heard that FHA went up on their loan amounts, but I heard this information before the market hit the skids.

1. What amount will the FHA loans give?

2. Can my son use his lease payments and his other bills and check copies of his 27 months of condo mortgage payments as credit history? Should I get affidavits from the landlords and mortgage company as back-up?

3. Will he have to pay a higher interest rate because he has no credit history with the credit companies?

4. With the new restrictions will he be able to get a loan at all?

5. Would another type of loan be better for him?

I know I have other questions that I can't think of right now, but these are good for starters. OH.....another thing we are wondering is do mortgage lenders look at building a home the same way as an existing home?

I was on the side of town that lost everything in Katrina and I now have a home on the bayou that is raised and safe from flooding. My son has been talking about moving in my neighborhood, but we would have to purchase a lot and have a raised home built for him.

I joined several mortgage related forums today and I'm posting this on all of them in hopes of getting some answers. I have to give the notice of non-renewal to the landlord on February 1st and need to find him a home by mid April.

Thanks for taking the time to read this! I appreciate the help.
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