An increasing number of homeowners are in dire straits in the wake of the sub-prime mortgage debacle. They have adjustable rate mortgages which have been or will soon be set to an elevated interest rate, and they find that they will not be able to pay the increased monthly amount. They are going under financially. There are not many alternatives open to them. They can declare bankruptcy, they can go into default, or they can simply walk away and allow the bank to repossess the house.

Fortunately, there is another option which is called "rent back house" option. The working of rent back idea is pretty simple: you negotiate the agreement with the buyer, once you sell your house, to rent the house from them and the buyer is ready to sell the house back to you, an additional arrangement known as "sell and buy back".

Rent back house agreements are, to an extent, "win-win" situations. The seller gets to stay in their house, which is comforting as well as non-disruptive. The buyer not only acquires real estate, they get a steady income stream, and a motivated buyer (presumably) once their economic situation improves.

This program however, would not only benefit those people who knowingly got tricked into getting an adjustable rate mortgage, or even those who knew exactly what they were doing, but many other people stuck with a bad loan due to the many reasons banks are allowed to do such things. Some of the reasons might be personal problems such as getting divorced, unpaid medical bills, bills or loans going to collection or other legal matters.

If you're a seller considering a rent back house option, talk with a reputable realtor or search the internet for more information about how the option works. You will also need to hire an attorney to look after your best interests and help you get the best possible deal.

If you are considering investing in this option, search under "homes on sale and rent back" or consult with a realtor yourself. This is, however, a "buyer beware" situation for you. Be sure you also have an attorney involved and that you thoroughly check out the buyer to determine if they are reputable.