Arms Length Affadavit and Renting property back from new owner
I have a question and have googled for weeks trying to get an official opinion on this from someone who might really know. It just doesnt seem to be addressed anywhere. Here it is:
"Affiant further says that there are no agreements or understandings, written or implied, that will permit Seller to remain in the above mentioned property as a renter or to regain ownership of said property at anytime after the execution of this short sale transaction"
This is the wording in my arms length affadavit for my short sale. I know the offer that has been submitted to my lender is someone who is going to rent the property out. When the arms length affadavit was signed and also by the COE there will not be any discussion and there hasn't been and won't be any written agreement, any implication of me renting the property back.
What if I ask the question about the buyer renting back to me after the COE and they would like to do that? I see no way by reading the exact legalese of that affadavit that any violation of that ffadavit has occurred. If the lender was to pursue anything, they would be having to prove something that never happened. Is my thinking correct?
I also think it is written in a way to scare people off from doing that but to those who read it closely who have a bit of a legal mind can see that they know they have no legal recourse in the event a rental agreement truly occurs in the fashion I described. Am I corrrect or somewhat correct or not correct?
Replies to This Discussion
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Permalink Reply by Smitty on
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Paul,
Again, I agree with you. You SHOULD be able to do whatever the heck you want after you own the property and if the buyer wants to rent to you, then he SHOULD be able to do it
Here's the problem. Mortgage fraud like any fraud boils down to intent. Were you intentially trying to get around this line in the addendum? The answer would be YES. Could the lender prove it? Most likely NO.
My suggestion to play "safe" would be to sign the addendum and cross out and initial the line you don't agree to. We've done it before. The lender at that point has the option of chosing whether or not they will approve the sale.
There is no law on the books to my knowledge that a homeowner can't rent a property back to a previous short sale owner, but there are plenty of laws that protet the lender from fraud which can lead to prosecution.
It's extremely convuluted, but unfortunately it IS the nature of short sales right now.
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Permalink Reply by Paul Jones on
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Talk about trolling or antagonizing, why would I antagonize the bank? Why would I want to bring attention to something that is a very delicate issue to the banks as evidenced by the fact that knowing they can't tell people what to do and what not to do after COE they write an affadavit to pull wool over peoples eyes. No reason to do that. If you have anything constructive to say it might be some advice as to where I could find an attorney message board. Stop being such a pain, Payne.
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Permalink Reply by Jeff Payne on
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Paul, you are the person that started this post and you act like a child when people do not agree with you. Pick up a phone book, and look under attorney, you will find plenty of attorneys who will gladly answer your question. You are trying to justify why you are going to defraud the lender or you would not have posted this topic or like other message boards that you post on, you are just trolling and looking for arguments. All anyone has to do is google your email address and see the other boards that you post on.
Sorry that you can not find anyone on here that is telling you what you want to hear, this is message board to discuss short sales and how to get them approved, not a message board on how to defraud the lenders by selling your home and renting it back.
Paul Jones said:Talk about trolling or antagonizing, why would I antagonize the bank? Why would I want to bring attention to something that is a very delicate issue to the banks as evidenced by the fact that knowing they can't tell people what to do and what not to do after COE they write an affadavit to pull wool over peoples eyes. No reason to do that. If you have anything constructive to say it might be some advice as to where I could find an attorney message board. Stop being such a pain, Payne.
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Here you go, http://messages.yahoo.com/Business_%26_Finance/Columnists/threadvie...
That should be easy since you already troll the yahoo groups
Paul Jones said:Talk about trolling or antagonizing, why would I antagonize the bank? Why would I want to bring attention to something that is a very delicate issue to the banks as evidenced by the fact that knowing they can't tell people what to do and what not to do after COE they write an affadavit to pull wool over peoples eyes. No reason to do that. If you have anything constructive to say it might be some advice as to where I could find an attorney message board. Stop being such a pain, Payne.
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Here is another one http://www.warriorsfortruth.com/forum/viewtopic.php?f=3&t=8152&...
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Permalink Reply by Bryant Tutas on
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OK guys reign it in. I think this discussion is dead and buried. Let's move on to something constructive.
Don't make me use the "smite" button" :)
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Done :)
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Fair enough Bryant. Im done as well. That guy insists on getting the last word in. For something to constitute fraud it has to either be illegal or be in violation of a contract or affadavit. He doesnt know whether this situation is fraudulent or not yet he insists on calling it fraudulent. He is the provocative one.
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Smitty said:Paul,
Again, I agree with you. You SHOULD be able to do whatever the heck you want after you own the property and if the buyer wants to rent to you, then he SHOULD be able to do it
Here's the problem. Mortgage fraud like any fraud boils down to intent. Were you intentially trying to get around this line in the addendum? The answer would be YES. Could the lender prove it? Most likely NO.
My suggestion to play "safe" would be to sign the addendum and cross out and initial the line you don't agree to. We've done it before. The lender at that point has the option of chosing whether or not they will approve the sale.
There is no law on the books to my knowledge that a homeowner can't rent a property back to a previous short sale owner, but there are plenty of laws that protet the lender from fraud which can lead to prosecution.
It's extremely convuluted, but unfortunately it IS the nature of short sales right now.
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Smitty it is much more important to me that the short sale goes through. Where I am going to live is very secondary to making sure the short sale goes through. Thank you for being the only rational person on this board. One guy is telling me to do it and then tell the bank I did it. I was here trying to get some mature dialogue about it. If a lawyer told me it is mortgage fraud I wouldnt do it clearly. Nor do I want to pay for a lawyer. I spoke to a lawyer who said I'm on the right track. I would want more than that. Maybe a 30 minute discussion about it. I came here as a potential alternative and you are the only person who gave rational answers despite not being a lawyer.
Paul Jones said:
Smitty said:Paul,
Again, I agree with you. You SHOULD be able to do whatever the heck you want after you own the property and if the buyer wants to rent to you, then he SHOULD be able to do it
Here's the problem. Mortgage fraud like any fraud boils down to intent. Were you intentially trying to get around this line in the addendum? The answer would be YES. Could the lender prove it? Most likely NO.
My suggestion to play "safe" would be to sign the addendum and cross out and initial the line you don't agree to. We've done it before. The lender at that point has the option of chosing whether or not they will approve the sale.
There is no law on the books to my knowledge that a homeowner can't rent a property back to a previous short sale owner, but there are plenty of laws that protet the lender from fraud which can lead to prosecution.
It's extremely convuluted, but unfortunately it IS the nature of short sales right now.
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Permalink Reply by Thom Colby CA Brkr 888-391-5245 on
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Paul -
The mere fact that you are looking for a loophole says it all.
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listen people, i posted this well over a year ago. i dont know who or why this post was brought back or why its not dated. i completed a short sale with no lates. i moved to a much nicer place. i dealt directly with freddie to ensure i could do it with no lates. i had no promissory note and my agreement stated that i would be receiving a 1099c. i hope to be getting that within a few weeks. my realtor did the sale. i did the whole banking part. my ficos are now back in the mid 700's. i can buy again at any time with an fha loan.
not sure why we are still discussing this post. i do however have a GREAT topic for a post that NO ONE is talking about.
the mortgage relief act of 1997 expires at the end of 2012. if not extended people will owe taxes on their short if they have a positive personal balance sheet. are any of you thinking about this? i would think it will be extended but i havent heard anything about it
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