Has anyone been offered this option via SPS?  This little known, sister to the Short Sale, is claimed to be like a short sale except without the arms-length restrictions.  However no closing costs, attorney fees, or relocation assistance can be bundled in to the package.

The seller, at least according to the contract I receieved, can 'only' profit from the transaction with prior approval by SPS.  HUD-1 must still match HUD.

I'd appreciate any experiences or insight on this program.

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don't understand your post  Is the lender going to receive net proceeds that are less than full payoff?  Then its a short sale and no funds, other than approved relocation, can go to the seller

Typically a short sale and a short pay are exactly the same thing. Not sure if you are referring to a 1st mortgage settlement ( short pay ) where the borrower can bring a lump sum and settle while keeping the home. If another buying is coming in, it's a short sale.

Thanks for the responses.

@Tony Morales

Yes, Indeed those are the key components of a Short Sale, and yes @Brett Goldsmith you nailed it.  In fact in this situation the 1st position lien and a 2nd will be settled for less than the borrower's balance.  She had a messy modification situation, then was advised to stop paying altogether, the total balance started growing at one point, and just kept growing.

The requirements for this program have some odd specifics.  But I was told that the noteholder and/or servicer neither NEED to nor WANT to know what happens after this closes.  They don't care if it's done precisely like a Short Sale, via a P&S, or if the funds are provided by another lender.  But the funds MUST be wired from the borrowers account.  So I have to gift them to the borrower.

As I'm making a request for the commercial loan or funding from an investing partner, it's coming off a bit awkward to explain that the funds must be gifted to the borrower.  I'm sure there are several legal instruments that exist to protect a lender/investor in this case, but wouldn't mind a tip on the specifics.  

Thanks again

 I have a short sale with SPS where the buyer who is an attorney will not sign the arms length would this "short pay" be an option?

why would a buyer not want to sign the arms length?   Are they related to seller?

Sounds like trouble already.  There are lots of options.  Watch out for 'legal-ish' deals, pros know how to leverage that sort of thing ruthlessly.

Deal won't get done if they don't sign. What are they scared of? Are they related to seller or do they have a business relationship?



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