Short Sale Rent Banks: Which banks allow them and which ones don't.

Short Sale rent backs are a great solution for a lot of people, but a lot of banks have you sign an "Arms Length Affidavit" that doesn't allow it.  From reading through some comments, it looks like some banks allow it, and some don't.  I thought it would be usefull to start a thread where everybody can post their past experiences with certain banks, and post whether each bank allows them or not.   The one I am dealing with now is Wells Fargo and I have found that they do not allow it.   I hope we can make this a nice reference point that we can all share!

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Good idea Eric. This far I haven't run across any that would allow a rent back.
I personally haven't either, but I have been reading a lot about it and I know that some banks will allow it. And when I say "allow it" I mean that in their "Arms length affidavit", they don't have a clause about a rental agreement.

Bryant Tutas said:
Good idea Eric. This far I haven't run across any that would allow a rent back.
So far I have only seen Wells Fargo not allow seller rentals. My team has a cash investor pool that is very interested in Seller Rent Backs. We are now comparing payoff approvals and probing different banks for answers. When I have that list I will gladly share it. I am curious to see who else has any knowledge about this...
I have only heard of this with foreclosed properties and deed-in-lieu's. I do know that it is actually illegal in some states, though more research would be needed to confirm which states. Check your own states first. There have been a lot of scams involving rent backs in the past couple years so they are frowned upon in a lot of states. That being said, I think it is hilarious that some of the investors would rather take the loss and let the seller rent it back, when they could have just modified the loan.
Thanks Brett! I am definitely interested to hear which banks will and which won't. There is a huge opportunity to get short sale listings and sales here.

Brett M. Swenson said:
So far I have only seen Wells Fargo not allow seller rentals. My team has a cash investor pool that is very interested in Seller Rent Backs. We are now comparing payoff approvals and probing different banks for answers. When I have that list I will gladly share it. I am curious to see who else has any knowledge about this...

I tried for a very long time to modify the loan with BOA. Finally, out of money, I just resorted to short sale. The interesting thing is my modification would only have saved me a minor amount of money for a whole lot of credit damage.

Sean Wilder said:

I have only heard of this with foreclosed properties and deed-in-lieu's. I do know that it is actually illegal in some states, though more research would be needed to confirm which states. Check your own states first. There have been a lot of scams involving rent backs in the past couple years so they are frowned upon in a lot of states. That being said, I think it is hilarious that some of the investors would rather take the loss and let the seller rent it back, when they could have just modified the loan.
Terry,
Could you elaborate on your experience with trying to get a loan mod? There are a lot of people that consider it and would appreciate learning from your experience.
Thanks

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