Short Sale Affidavit


As relates to a certain real estate purchase contract dated _____/_____/_____ concerning the

following Mortgaged Premises;

Property address: ______________________________

______________________________

under which the existing Lender(s) has agreed to accept less than full payoff of the debt owed

in exchange for release of the Mortgaged Premises (a short sale), each of the signatories

hereto hereby certify and affirm under penalty of perjury, that to the best of their knowledge

and belief;

(a) The sale of the Mortgaged Premises is an "arm's length" transaction, between the

parties who are unrelated and unaffiliated by family, marriage, or commercial enterprise;

(b) There are no agreements, understandings or contracts between the parties that the

Seller will remain in the Mortgaged Premises as a tenant or later obtain title or

ownership of the Mortgaged Premises,;

(c) Neither the Borrower(s) nor the purchaser(s) will receive any funds or commissions from

the sale of the Mortgaged Premises, except as allowed by the short sale approval letter

(if applicable);

(d) There are no agreements, understandings or contracts relating to the current sale or

subsequent sale of the Mortgaged Premises that have not been disclosed to the Lender;

(e) None of the signatories will receive any proceeds or other remuneration from this

transaction except as set forth on the Settlement Statement; and

(f) None of the signatories have knowledge of any offer to purchase the Mortgaged

Premises for a higher purchase price than the purchase price contained in the certain

real estate purchase contract referenced above that has not been presented to the

Lender(s).

Buyer(s) further certify and affirm under penalty of perjury, that;

(g) the property will not be sold within 90 days of the closing date of the subject real estate

purchase contract; and

(h) the property will not be rented to the Seller after the closing of the subject real estate

purchase contract.

Each signatory also understands, agrees and intends that the Lender, any Investor (in

particular Freddie Mac if applicable), Insurer or Guarantor, of the subject Mortgage are relying

upon the statements made in the affidavit as consideration for the reduction of the payoff

amount of the Mortgage and agreement to the sale of the Mortgaged Premises and agrees to

indemnify the Lender, any Investor (in particular Freddie Mac, if applicable), Insurer or

Guarantor, of the subject Mortgage for any and all loss resulting from any negligent or

intentional misrepresentation made in the affidavit including, but not limited, to repayment of the

amount of the reduced payoff of the Mortgage. Each signatory further understands that a

misrepresentation may subject the responsible party to civil and/or criminal liability and agrees

that this certification will survive the closing of the transaction.

_____________________________ ______________________________

(Seller) Date (Seller) Date

_____________________________ ______________________________

Print Name Print Name

-----------------------------------------------------------------------------------------------------------------

_____________________________ ______________________________

(Seller’s Broker) Date (Buyer’s Broker) Date

____________________________ ______________________________

Print Name and Company Name Print Name and Company Name

-----------------------------------------------------------------------------------------------------------------

_____________________________ ______________________________

(Buyer) Date (Buyer) Date

_____________________________ ______________________________

Print Name Print Name

-----------------------------------------------------------------------------------------------------------------

_____________________________ ______________________________

(Settlement Agent) Date

_____________________________ ______________________________

Print Name and Company Name Print Name and Company Name

_____________________________ ______________________________

Print Company Address Print Company Address

-----------------------------------------------------------------------------------------------------------------

Note to Settlement Agent;

ALL SIGNATURES MUST BE ACKNOWLEDGED BEFORE A NOTARY PUBLIC AND

DOCUMENTARY EVIDENCE ATTACHED HERETO IN ACCORDANCE WITH THE

REQUIREMENTS OF YOUR STATE LAWS

(Transaction Facilitator, if any) Date

Tags: Affidavit, Sale, Short, Wells

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Replies to This Discussion

  We have been using this for almost a year.  It's become a standard form for us.

 

Jackie Kumm

Edina Realty

Yes..nothing new here. 

Yes, this is Freddie Mac's standard addendum. It may seem "new" if this is the first WF/Freddie Mac file for you.

well you just heard it from someone who would know! Thanks for contributing to the site Kayte. See you at Mega camp

Kayte Gentry said:

Yes, this is Freddie Mac's standard addendum. It may seem "new" if this is the first WF/Freddie Mac file for you.

Hi All,  Been doing these for 2 years now with Wells and Freddie never got one. This was sent to me by our corporate brokerage who advised we cannot sign these. 

Hi all, Thought to include our brokerage letter to agents and Attorney annotations on BOA Broker Affidavit

New developments have come about regarding short sales, specifically Bank of
America and Wells Fargo.  In the attached addenda, I have provided copies of
both banks' newly "required" additions to the purchase agreement.  The Bank of
America document is marked up with legal counsels highlights and comments.
>
>UNDER ADVICE FROM OUR ATTORNEY AND REGIONAL LEADERSHIP, UNDER NO CIRCUMSTANCES
ARE YOU TO SIGN THESE DOCUMENTS REGARDLESS OF THE BANK'S UNWILLINGNESS TO
PROCEED OTHERWISE.
>
>I cannot stress to you the importance of this information.  These two banks are
now requiring the brokers involved to become actual parties to the transaction,
placing you and our brokerage at significant risk.  In addition, there are other
portions of the agreement that increase your risk exposure.

Thoughts?

Attachments:
Rita - I believe we put ourselves at SIGNIFICANT risk simply by doing short sales. I've downloaded your attachment and will "digest" it before I comment further on it. However, if I followed thestrict advice of even my own attorney, I wouldn't be doing short sales at all. My fiduciary responsibility is to the seller and if I've agreed to assist them with a short sale and stand in the way of it's successful closing simply because I refuse to sign an addendum which is, in effect, truthful, then I have FAILED my client. I believe that puts me in a least as much legal jeopardy as signing the addendum in the first place. Our risk exposure is extreme in this business and I don't take it lightly so I'll read this and get back to you!
EVERYONE needs to read what Rita wrote...I just had the attorney I work for review her pdf and he about had a heartattack..we are not to sign these...it opens you up to liability and requires you to break your license oaths...this is very serious and I assume will be addressed by attorneys all over the US....example:  If you have a house with a debt of $300k and you sell it for $200k and the buyer turns around and sells it for $250k..the bank can come after you the broker, the buyer and the seller for the $50k difference....essentially BOA and WElls Fargo are trying to stomp out anyone making money on short sales...thanks for this Rita...good catch!!!

Rita Legan said:

Hi all, Thought to include our brokerage letter to agents and Attorney annotations on BOA Broker Affidavit

New developments have come about regarding short sales, specifically Bank of
America and Wells Fargo.  In the attached addenda, I have provided copies of
both banks' newly "required" additions to the purchase agreement.  The Bank of
America document is marked up with legal counsels highlights and comments.
>
>UNDER ADVICE FROM OUR ATTORNEY AND REGIONAL LEADERSHIP, UNDER NO CIRCUMSTANCES
ARE YOU TO SIGN THESE DOCUMENTS REGARDLESS OF THE BANK'S UNWILLINGNESS TO
PROCEED OTHERWISE.
>
>I cannot stress to you the importance of this information.  These two banks are
now requiring the brokers involved to become actual parties to the transaction,
placing you and our brokerage at significant risk.  In addition, there are other
portions of the agreement that increase your risk exposure.

Thoughts?


Kayte:

 

There is always risk..true..but this documents is way out there are exposure and liability....even if you decide to sign the addendum, you will by violating your license as a realtor..plus you will have to let the sellers know that they face civil and criminal liability...hmmm...I don't think too many sellers are going to want to be on the hook for that kind of money...the degree of this is going to vary from deal to deal...but I wouldn't take it lightly....This will more than likely start being addressed by lawyers all over the US..because in essence the bank is asking you to violate your oath...your oath is to the seller...not to the bank....the attorney I work for is fixing to draft up a document to challenge BOA on this addendum...it truly is insane..thanks again to Rita....
Kayte Gentry said:

Rita - I believe we put ourselves at SIGNIFICANT risk simply by doing short sales. I've downloaded your attachment and will "digest" it before I comment further on it. However, if I followed thestrict advice of even my own attorney, I wouldn't be doing short sales at all. My fiduciary responsibility is to the seller and if I've agreed to assist them with a short sale and stand in the way of it's successful closing simply because I refuse to sign an addendum which is, in effect, truthful, then I have FAILED my client. I believe that puts me in a least as much legal jeopardy as signing the addendum in the first place. Our risk exposure is extreme in this business and I don't take it lightly so I'll read this and get back to you!

Rita!!!

Wow!!!  I reviewed that attachment serveral times!!! (I wonder what the attorney fee was for that "mark up"?) Please keep us posted if your company is successful on refusing to execute these!

 

-First, that is a pretty "standard" arms length form, yes the word "addendum" scares me has it does modify a contract, and this very one tends to make the "agents" parties! Heck we can always become "parties" especially in law suits. Perhaps some of our attorney members can comment on this!

The sad part is that most lenders have made this part of allowing a short sale! WHY? Because every potential sleezy item that is addressed in these docs, has happened actually alot! I have seen these things come to play at the very onset of short sales!

What a deal! Sellers, friend, relative ect, buys short sale property, Seller rents back, and someday down the line buys it back from the landlord! Yes, a lot of buyer's were taken advantage of in the hot market! There was no such thing as a "starter home", they bought the bigest, expensive house, that a mortgage company would "qualify" them to have, not even thinking how they would pay that monthly payment they signed for because of their "stated income".

We as agents, were never allowed by law to make "side deals" receive compensation out side the deal, offer kick backs etc or was buyer and seller! (without a heck of lot of disclosure!)

-Another note: Dual agency!!! Well that is agains the law in Florida.. ( I dont even what to get starter on that! ) So I dont have a problem here, (we are copp-out "transaction brokers" However, my company acts as single agent to seller, non-rep to buyer. I have done many times "disclosed dual agency" in Connecticut! (didnt have any problem with it!)  So I do wonder how these arms lengh transactions affect states that do allow dual agency! As I mentioned in a previous post, I am not confortable assigning or putting another agents name on the contract to avoid this, I rather fight it! I am hoping that NAR will aggressively work with lenders to help them understand this. This happens with REO's also! Heck why is everyone in our pockets! It' nice to "double dip" once in awhile!

Please continue to share... on this!



Rita Legan said:

Hi all, Thought to include our brokerage letter to agents and Attorney annotations on BOA Broker Affidavit

New developments have come about regarding short sales, specifically Bank of
America and Wells Fargo.  In the attached addenda, I have provided copies of
both banks' newly "required" additions to the purchase agreement.  The Bank of
America document is marked up with legal counsels highlights and comments.
>
>UNDER ADVICE FROM OUR ATTORNEY AND REGIONAL LEADERSHIP, UNDER NO CIRCUMSTANCES
ARE YOU TO SIGN THESE DOCUMENTS REGARDLESS OF THE BANK'S UNWILLINGNESS TO
PROCEED OTHERWISE.
>
>I cannot stress to you the importance of this information.  These two banks are
now requiring the brokers involved to become actual parties to the transaction,
placing you and our brokerage at significant risk.  In addition, there are other
portions of the agreement that increase your risk exposure.

Thoughts?

Since I can not attest to what the buyer and the buyer's agent have agreed upon, or what the buyer's intention for the home, I have no desire to sign this document.  We and the seller are going to be on the hook all the way around if we start signing these.  

Kimberly

Friends, Here is the BOA Affidavit with attorny anotations I couldn't include earlier hope this will up load now.
Attachments:

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