My brother has bad credit now. It is not his fault.... his real estate manager failed to make three payments on his rental houses while he was at sea for some months on a ship tour. So he has a wife and baby now, and needs a family car. He has a nice truck but it is a single-cab. He applied for a car loan at the Navy Federal Credit Union. The truck almost paid off, just another 4 months...and will free up about $325.00/mo. The same NFCU financed it, and I have a car (an old clunker Mercedes) nearing payoff financed by them also. Well, he was turned down because of this black mark on his credit. Nevertheless, he was looking at a car on eBay, and he asked me if I would use my A-1 perfect credit to purchase the car for him. So I called Navy Federal and I have a pre-approved check/voucher for $3500 coming to purchase the car. No papers of any kind have been signed, and the pre-approval was obtained over the phone. As soon as I knew we had the check coming for the BUY IT NOW price, we went ahead and clicked BUY IT NOW. It is a nearly immaculate 92 Volvo Estate TI wagon WITH a spare engine and many other parts. I just assumed that the seller would be signing the title over to me when I hand him the check. Now...after making a committment to buy the car...I find out that HE wants the title to the car at time of sale! He said the reason is "so that he does not have to pay double". (I don't even understand what he means by that. If *I* get the title until the loan is paid off, yes--- he would pay twice for the title fee...but after completing payments it will be a gift to him, so there would be no tax to pay a second time) Of course, whether I have the title or he does, he is still going to make the monthly payment payable to me, and I in turn pay the monthly bill ($110...over 3 years) to Navy Federal. We both have an agreement that if he is more than 30 days late on a payment the car goes back to me until he gets caught up. But the problem is that I don't think he CAN take the title to the car. I am the actual buyer, and I believe it would violate the rules of the loan if someone else who isn't the buyer signs the title. Doesn't the actual buyer of the car HAVE to also take legal ownership (albeit with a lien)? I'm thinking now that perhaps if they even found out that I wasn't actually going to be in posession of the car, that that also would violate the rules. Apparently he thinks that it doesn't matter to the Credit Union who signs the title. Am I right or wrong? To make matters worse, now he says he can't afford comprehensive insurance on it. But even if the bank didn't require it, I certainly would! So he is trying to buy a car before he is finacially even ready to handle the expense.
Since it would be a nice family car for my family, and my old clunker needs replacement, and I have enough in my NFCU savings account to pay off the Mercedes, I made a counter offer. I told him he could just drive me there to pick up the car, and let me buy/ keep/own the car for about a year, then I would sell it to him at fair market value. The problem there is that after a year's use, fair market value might not be enough to pay off the loan, and so I'd be stuck! Advice?