Freddie Mac no longer allowing Incs and Trusts to purchase short sale properties!!!

Lookout, everyone - as of the first of this week, Freddie Mac stopped allowing corporations and trusts to purchase short sales.  I found this out after our short sale was approved by BofA but then denied by Freddie Mac today.  They will allow LLCs, however.

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OMG.  That is alienation of some sort.  Discrimination.  WTH!!  Freddie Mac plays by their own drum.

It is very stupid to me.  If they are concerned about why can't they just ask for the articles of incorporation to be included with the purchase contract?  That will eliminate alot of investment condo buyers in my area.

I don't know, Jeff.  They used to do that (ask for articles of inc.).  Truly, I like the idea of giving regular citizens the opportunity to buy a home and take advantage of the low prices and interest rates.  It's too hard for them to compete against cash investors. 
Donna, good old "regular citizens" buy in Trust all day long.  It's not always an investor.  I have bought property in trust because it's a SAFE way to own property. 
Donna, with all due respect, Freddie doesnt care about regular citizens.  If they did they would put more emphasis on short sales over foreclosures.
You got that right!

Well said brotha!

 

Buy it and then transfer to the Trust in Escrow.  Don't understand why LLC is ok, and not trusts?  And at this point, as long as the Buyer pays FMV for the property..why run off a Buyer???  We NEED them!
EXACTLY!  It's not like there are a bazillion buyers out there.  There is a HUGE glut of homes on the market. So will they allow someone to buy the beneficial interest if the property is already in a trust??  Doesn't make sense.

I heard about that Smitty. There were some doing flips, buy in a trust, llc..etc and then transfer there rights to the new end buyer.

Is this correct?

No.  That's not what I meant but I'm sure that's completely possible.  Trusts are an excellent way to own property and I can't FATHOM why they would exclude trusts.  I don't know much about buying as an inc, but I can't imagine it's much different than an LLC.  So why would FM allow purchasing in LLC's and not trusts and inc's...it doesn't make ANY sense and in my opinion it's alienation or discrimination.  It's disgusting.

Be careful not to transfer too soon.  Make sure the buyers are aware of language like line 8 of BAC's new short sale addendum.

 

"8. Buyer agrees that property cannot be sold or otherwise transferred within 30 days of closing;. "

 

 

I have seen some bank addendums require as long as 6 months before transfer can occur.  If the transfer occurs within the disallowed timeline, the listing agent may get blacklisted at best, and the sale could undergo fraud investigation at worse.  Not that I think they would ultimately prosecute if they saw that is was same owner changing form of ownership...but who wants to have to go through that scrutiny regardless of what the outcome would be.

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