Has anyone ever seen a lender agree to a short sale where the buyer is related to the seller.
The Purchase Agreement states the buyer is going to live in the property as their primary residence, and it's a VA Compromise Sale with Wells Fargo.
Reliance Realty, Inc.
This likely will be declined be from my experience if the servicer or va catches any wind of this during their audits. It never hurts to ask though.
And the reason I'm asking is exactly a year ago, I had a VA short sale through Wells Fargo and although that was an arm's length transaction, the Wells Fargo approval letter stated in item #3. "The short sale must be an arm’s length transaction (unless the property is secured by a VA loan). This means the seller and buyer must be unrelated to each other by family, marriage or commercial enterprise. If it’s determined that the sale is not an arm’s length transaction, this approval will be null and void."
I found it odd that the letter stated in parenthesis, "unless the property is secured by a VA loan." I take that to mean VA doesn't have any set rules against seller & buyer being related?
The VA won't have an issue with this, but the servicer probably will. I had someone make the attempt with Chase, who nixed the sale. My VA seller called the VA and they said it was the servicer's call.
Wendy Rulnick www.shortsales-emeraldcoast.com