Wells New Short Sale Affidavit-Has Anyone Ran Into It Yet?
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
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_____________________________ ______________________________
(Seller’s Broker) Date (Buyer’s Broker) Date
____________________________ ______________________________
Print Name and Company Name Print Name and Company Name
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_____________________________ ______________________________
(Buyer) Date (Buyer) Date
_____________________________ ______________________________
Print Name Print Name
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_____________________________ ______________________________
(Settlement Agent) Date
_____________________________ ______________________________
Print Name and Company Name Print Name and Company Name
_____________________________ ______________________________
Print Company Address Print Company Address
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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) DateReplies to This Discussion
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Permalink Reply by Jeff Payne on
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Selling to a family member may not be fraud, I agree. Selling to a family member in a short sale is one of the things that Wells will not allow based on their Arms length transaction affidavit. I did not see anywhere on the addenda that
referred to familial status, I saw where it discussed a sale between to family members.Darlene, I agree with that the banks need to stop the nonsense, it really is stupid but remember that a short sale is not someones right. They signed a note and agreed to pay it back, now they can't and need help from their lender, they have to follow the lenders guidelines.
One of those guidelines is that they can not sell the home to a family member and they can not rent the home back.
I thnk we have bigger fights than this and I choose to fight them on other things like deficiencies that really matter.
Darlene Root said:You are not breaking a law, but ou could be in violation of the Fair Housing Act. In pre license training we all learned that you (or anyone else) cannot discriminate against any Race, Color Creed, National orgin, Religion, Famililal Status.....................By asking the seller to do that is asking them to violate this Act. This is not just for a rental property; it is for the sale or lease of any property. The lenders are aserting themselfs higher than the law.
Wells Fargo (although they are not the seller and they are acting like they are) is asking the seller (and agents) to violate this vary Act. This is no different than asking a seller not to sell to a Catholic, Itialian or Indian.
If we are representing a seller who is not in foreclosure, can their lender dictate that they cannot sell to their mother, brother, father, ect? No. Selling to a neighbor, family memeber or business associate is not fraud. Asking someone to not do it, is.
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Permalink Reply by Shayna M. Bechtel on
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Familial Status under the Fair Housing Act prohibits parties from refusing to sell or rent to a family in which one or more children under 18 live with a parent or legal guardian/custodian. It is intended to stop discrimination against families with children. It is not applicable here unless Wells Fargo declines a short sale because the buyers have children...
I'm with Jeff on this one. Documents like this are always based upon the standard of knowledge. If I have no knowledge of any wrong doing, then there is no issue with the document. If I do, then I should not be involved in the transaction as it stands. Can I find a hundred issues with this document? Yes. Can I derail a client's much needed short sale based upon them? No.
As frustrating as I find the short sale process, and I promise you I do, I try to always remember that the lender is under no obligation to approve a short sale...it helps me keep a good frame of reference (and a little bit of my sanity)...
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Permalink Reply by Christina Conrad on
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Not to bud in but I can answer that question....by signing the document you are taking on the liability of what the seller and buyer are doing or not doing, by simply signing the document...true, we only know what we are told...this was what I was trying to explain last week....We don't know what a buyer is going to do with the property after they purchase the same, unless, they tell us...the bank is making us liable for what is done regardless..so if a buyer flips the home for $40k more than what it was bought for the bank has legal recourse against you, the buyer, and the seller...just because you signed the addendum...that is why this document is so dangerous...it is the most craziest document,,insane....by signing you are putting your neck on the chopping block regardless of whether you not what the buyer and seller are doing...
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Darlene: Once again you are right on target..people are going to have to make their own decisions...but some people are going to get burned and it is going to be a 3rd degree burn...there are some things worth risking..but being on the hook for 30K plus is not my idea of a good rish..I like gamble, but not that much..plus it is wrong for them to request what they are requesting..wrong on soooooooooo many levels...but each to their own.
Darlene Root said:I stand correct: Asking someone to discrimintate is againt the law, not just a violation of the Fair Housing Act. It is on your listing agreement as well. I have had sellers agree to sign the arms length, however I do not sign it. If they do sign it I have them sign a hold harmless agreement stating that they hold me harmless in their decision to sign something that has clear language allowing them to violate the law. It may not be a big deal to most of you, however this whole thing has not even reached the ACLU. And when it does, someone is going to be the sacrificail lamb..........and it is not going to be me.
As far as the other "flip" language. I do not know what the intentions if that buyer is. They may say they are not going to sell it, however if they decide to lie, I dont want my signature on the doc.
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Permalink Reply by Kayte Gentry on
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Shayna - glad to have your "voice of reason" (along with Jeff's) in this discussion! I agree whole heartedly! A short sale approval is a PRIVILEGE granted by the lender and remembering that keeps us all in "check!"
Shayna M. Bechtel said:Familial Status under the Fair Housing Act prohibits parties from refusing to sell or rent to a family in which one or more children under 18 live with a parent or legal guardian/custodian. It is intended to stop discrimination against families with children. It is not applicable here unless Wells Fargo declines a short sale because the buyers have children...
I'm with Jeff on this one. Documents like this are always based upon the standard of knowledge. If I have no knowledge of any wrong doing, then there is no issue with the document. If I do, then I should not be involved in the transaction as it stands. Can I find a hundred issues with this document? Yes. Can I derail a client's much needed short sale based upon them? No.
As frustrating as I find the short sale process, and I promise you I do, I try to always remember that the lender is under no obligation to approve a short sale...it helps me keep a good frame of reference (and a little bit of my sanity)...
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Christina, I respectfully disagree, If you have no knowledge of the buyer or seller having any of these arrangements, then signing this document puts no liability on an agent. If you do have knowledge, that is another story. Sure you dont know what the buyer is going to do, but if you do you better not sign an agreement saying you have no knowledge.
There is one very important statement in this "To the best of their knowledge and belief". If to the best of your knowledge and belief none of that is happening, what is the issue with signing it.
If the buyer flips the house after the fact without my prior knowledge, I have ZERO to worry about because when I signe the document, to the best of my knowledge and belief, the buyer was not buying this to flip it. Not a thing to worry about unless you are the buyer that agreed to not flip it and even then I highly doubt there is much that can be done to them.
Christina Conrad said:Not to bud in but I can answer that question....by signing the document you are taking on the liability of what the seller and buyer are doing or not doing, by simply signing the document...true, we only know what we are told...this was what I was trying to explain last week....We don't know what a buyer is going to do with the property after they purchase the same, unless, they tell us...the bank is making us liable for what is done regardless..so if a buyer flips the home for $40k more than what it was bought for the bank has legal recourse against you, the buyer, and the seller...just because you signed the addendum...that is why this document is so dangerous...it is the most craziest document,,insane....by signing you are putting your neck on the chopping block regardless of whether you not what the buyer and seller are doing...
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Permalink Reply by Bryant Tutas on
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Ok I think you guys are making a big to do out of nothing. Basically all you are agreeing to is based on "the best of your knowledge and belief". If you are not aware of any side agreements then you certainly can't be held liable of the buyer decides to sell the property 60 days after closing.
And to imply that this addendum is discriminating against families...well I don't even know what to say about that. The seller can sell the property to anybody they want to at any time they want to. BUT if they aren't able to pay their mortgage in full then their lender has every right to set some guidelines. The lender is not selling the property. They are negotiating a debt. As long as all of their borrowers are signing the same addendum then there is no discrimination at all.
But of course agents, sellers and buyers do have choice. They do not have to sign this addendum. And WF does not have to agree to a short sale.
No knowledge. No liability. It's simple. Just be sure to not list the property for the buyer 30 days after closing :)
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Christina, you know that I value your opinion, we discussed this thru email too but I have to ask, Why is it wrong for a lender to have guidelines? Why would it be wrong for them to say that a buyer can not sell for 90 days? Since the lender is a third party that has a financial stake in this, why is it wrong for them to try to NET as much money as possible? I know alot of these are fix and flips but that is pretty fast to do in 90 days, those people do get punished. I think that the intent of the flip rule is to stop someone from buying the home at a deep discount and flipping to to the next buyer on the same day or week for thousands more, from Wells point of view, if the property could have been sold for 40,000, then why wasn't it?
Also, why is it wrong for them to disallow a family member from buying the home or wrong for them to not allow the seller to rent back? Those scenarios can and do lead to major fraud.
You and I and most of the members here do everything on the up and up but we have to jump through hoops and guidelines caused by those that tried to play the system.
I don't blame the banks for having guidelines and wanting certain rules, after all, they gave a loan that is now not being paid back.
Christina Conrad said:Darlene: Once again you are right on target..people are going to have to make their own decisions...but some people are going to get burned and it is going to be a 3rd degree burn...there are some things worth risking..but being on the hook for 30K plus is not my idea of a good rish..I like gamble, but not that much..plus it is wrong for them to request what they are requesting..wrong on soooooooooo many levels...but each to their own.
Darlene Root said:I stand correct: Asking someone to discrimintate is againt the law, not just a violation of the Fair Housing Act. It is on your listing agreement as well. I have had sellers agree to sign the arms length, however I do not sign it. If they do sign it I have them sign a hold harmless agreement stating that they hold me harmless in their decision to sign something that has clear language allowing them to violate the law. It may not be a big deal to most of you, however this whole thing has not even reached the ACLU. And when it does, someone is going to be the sacrificail lamb..........and it is not going to be me.
As far as the other "flip" language. I do not know what the intentions if that buyer is. They may say they are not going to sell it, however if they decide to lie, I dont want my signature on the doc.
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Bryant, you are a wise man! I would say just have an extended closing and close on day 91 after the sale :)
Bryant Tutas said:Ok I think you guys are making a big to do out of nothing. Basically all you are agreeing to is based on "the best of your knowledge and belief". If you are not aware of any side agreements then you certainly can't be held liable of the buyer decides to sell the property 60 days after closing.
And to imply that this addendum is discriminating against families...well I don't even know what to say about that. The seller can sell the property to anybody they want to at any time they want to. BUT if they aren't able to pay their mortgage in full then their lender has every right to set some guidelines. The lender is not selling the property. They are negotiating a debt. As long as all of their borrowers are signing the same addendum then there is no discrimination at all.
But of course agents, sellers and buyers do have choice. They do not have to sign this addendum. And WF does not have to agree to a short sale.
No knowledge. No liability. It's simple. Just be sure to not list the property for the buyer 30 days after closing :)
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I agree with you Jeff....but once you sign the document that is exactly what you are doing..obligating yourself for something you have no knowledge of....they are putting us in positions to be mindreaders, which we are not....I agree with you wholeheartedly, but that is not the issue....I will probably just shut up about this because the real estate company we work with has the same argument as you, they are failing to see the forest for the trees, so to speak....It all boils down to everyones individual ethical standards and what they are willing to risk...that will be different for everyone...sometimes we can be our own worst enemy......I will leave it at that....:)
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These are good conversations to have Christina, I believe that we can disagree without being disagreeable. When I am signing this document, I am telling Wells that I have no knowledge that there are any other agreements, no where in this affidavit does it say that I am obligated to pursue this transaction after closing to make sure that the buyer or seller are abiding by the affidavid. If I have no knowledge I did my job. It has nothing to do with ethical standards at all unless the people signing these addenda are signing them under false pretenses by knowing that it is not an arms length transaction.
This statement says it all
each of the signatories
hereto hereby certify and affirm under penalty of perjury, that to the best of their knowledge
and belief;
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It has been a good discussion. We had several very good discussions this weekend on the site. I appreciate all of you guys for participating. And I didn't have to smite one person this week!
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