Rent-to-own gone bad! HELP!!!

By Nicci

My husband’s mother and step-father divorced over a year ago.  While they were beginning the divorce proceedings his step-father offered to sell us their home for what was owed.  Thinking this was a good deal my husband jumped at the offer and moved us into the home on October 29th, 2010.  This was against my advice because we had not been approved for a mortgage and quite frankly I didn’t want the house.  However, he thought the loan was a "sure thing" and he moved us in.  When we moved in we knew there were extremely significant problems with the house.  The roof has needed replaced for years, the flooring in every single room needs replaced, all the windows need replaced, it needs a new furnace, the basement floods and the list just keeps going.  These were problems that my husband’s step-father knew about and had for years stated he would have to address before the home could be sold, long before he offered it to us.  Anyway we were hoping to be able to take a large enough loan out to purchase the home and make the needed repairs but circumstances beyond our control arose, I lost my job,  and we were denied the loan.  We stayed in the home and continued to pay his mortgage payment hoping to get a loan through our personal bank but were told we needed to wait at least 6 months to a year before they would approve us because my husband had just started a new job.  We decided that the best option was to enter into a rental agreement with the option to buy.  We asked for this in February and finally in June he brought us a rental agreement his attorney had drawn up.  I was uneasy about signing because it is effective from June 2011-June 2012 whereas we wanted it to be effective from our move-in date to October of this year, as the homeowner had stated he was OK with.  He told us not to worry about the dates that his lawyer had to put something in and that was just what he had put.  So because we really had no other options we signed, stupid yeah I know.  Now however we have a major problem.   My husband has been pre-approved for a mortgage BUT not for this home in the condition it is in. The loan officer has said that they will NOT under any circumstances loan any money on the home until the roof is replaced, by the homeowner, and that was just on inspection of the outside, they haven’t seen how bad the inside is yet.  Basically they say the home in the condition it is in is not a safe investment and that there was no lender in the world that would loan us money to purchase the home.  We told the homeowner this and he decided that he would purchase the shingles if we payed for the rest.  #1 we can’t afford to do this and #2 after living here almost a year we now know without a doubt we DO NOT want to purchase this house.  It’s a money pit plain and simple! But now our real problem starts.  When I lost my job I got unemployment and we were making ends meet, things were tight but we did OK.  Now however my unemployment has run out and we can’t afford to continue living here.  How can we get out of this rental agreement immediately without getting screwed?  HELP!!!!!!!! 

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