Hi,
I've got a situation with a relative who wants to buy a short sale property. I am well aware of the potential for fraud, but just thought I'd see if anyone had any success with getting a transaction of this nature approved.
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What I have seen is that lenders are pretty picky about an arm's length transaction. You can run it by the lender and see what kind of reaction you get but their fear is this is just a ploy to get the borrower out of the loan and still stay in the property. Not sure what you could do to convince them otherwise.
But you could try...
Steele
I think the issue on this is that it is too close to "fraudulent conveyance".
Not necessarily that it is fraudulent conveyance, but just more of a "red flag" event. So, it is just not worth the trouble of dealing with the regulator when they ask for documentation, justification and explanation.
I tried to sell a house short to a relative, once, when I first started with short sales. Disclosed the deal, explained the circumstances, etc. I had a very reasonable discussion with a BofA loss mitigation manager, who agreed that this was not fraudulent conveyance, but explained the "not worth it" point-of-view.
I basically agree on this. If I were the bank, I think I would not authorize the transaction either. Just not worth the trouble.
does anybody have a BOA arms length form they can send?
3. The Parties acknowledge and agree that the Subject Property must be sold through an “Arm’s-Length” Transaction. “Arm’s length” means two unrelated parties characterized by a selling price and other terms and conditions that would prevail in a typical real estate sales transaction. No party to this contract is a family member, related by blood or marriage, business associate or shares a business interest with the mortgagor (Sellers).
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