Replies to This Discussion

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on February 16, 2011 at 2:38pm

Tiffany -

Short Sale properties are RARELY approved to be purchased by "entities".  Yes, the buyer had to sign the addendum, but that's normal for all buyers to sign.  I would recommend the Contract be re-written with the Buyer as an INDIVIDUAL or in their INDIVIDUAL TRUST with a "No Assignment" clause and resubmit to the bank.

 

I've never seen a Pension Fund buy property through an agent - typically "Real" Pension Funds buy through large investment firms who manage assets for Pension Funds.

 

Something is not quite right - or - there is "more to the story"...  and THAT's why the bank is questioning it.

 

Best of luck !

 

Thom Colby

Broker / Negotiator

Newport Beach CA

 

Permalink Reply by Tiffany Cloud on February 16, 2011 at 3:36pm

Thanks Thom.  

Thom Colby said:

Tiffany -

Short Sale properties are RARELY approved to be purchased by "entities".  Yes, the buyer had to sign the addendum, but that's normal for all buyers to sign.  I would recommend the Contract be re-written with the Buyer as an INDIVIDUAL or in their INDIVIDUAL TRUST with a "No Assignment" clause and resubmit to the bank.

 

I've never seen a Pension Fund buy property through an agent - typically "Real" Pension Funds buy through large investment firms who manage assets for Pension Funds.

 

Something is not quite right - or - there is "more to the story"...  and THAT's why the bank is questioning it.

 

Best of luck !

 

Thom Colby

Broker / Negotiator

Newport Beach CA

 

Permalink Reply by Smitty on February 16, 2011 at 4:50pm

Tiffany, I've had several short sales with LLC's.  I'm actually surprised by Thom's answer.  It may be lender specific.  I did have the EXACT thing happen to me with an LLC that was purchasing a WF short sale I was working on but there was no assignment clause in the contract.  They asked for the property in a trust so the LLC thankfully already had a trust and we submitted it that way.  HERE'S the kicker, about a month later we ended up with a new negotiator that said "NO TRUST"  We had to submit an offer in under an LLC!?!?!?!?!?!?!?!?!?!?!?

 

We've submitted WF short sales and had to submit articles of incorporation detailing every member of the LLC before, but I can't remember if they were Freddie or not. It seems to be just a Freddie Mac thing. 

 

I can tell you you'll have a hard time with option language in a contract.  They want the buyer to take title.  I've only seen TWO approvals come in that didn't have the buyer's name written in that could have been remotely assignable.  I've never done it but have heard they CAN be assigned, but it's pretty hard.

 

Good luck.

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on February 16, 2011 at 5:00pm

Smitty -

 

I don't think there would be any issue if it were an LLC - I've closed MANY exactly as you have said but Tiffany's question was about the buyer "XYZ Inc., Pension Fund, xxxx Trustee" - that's hardly an individual using an LLC to take Title.  There's something odd about it and Wells as the Servicer for FMAC is being cautious to ensure a non-flipper for sure.

 

Thom

Smitty said:

Tiffany, I've had several short sales with LLC's.  I'm actually surprised by Thom's answer.  It may be lender specific.  I did have the EXACT thing happen to me with an LLC that was purchasing a WF short sale I was working on but there was no assignment clause in the contract.  They asked for the property in a trust so the LLC thankfully already had a trust and we submitted it that way.  HERE'S the kicker, about a month later we ended up with a new negotiator that said "NO TRUST"  We had to submit an offer in under an LLC!?!?!?!?!?!?!?!?!?!?!?

 

We've submitted WF short sales and had to submit articles of incorporation detailing every member of the LLC before, but I can't remember if they were Freddie or not. It seems to be just a Freddie Mac thing. 

 

I can tell you you'll have a hard time with option language in a contract.  They want the buyer to take title.  I've only seen TWO approvals come in that didn't have the buyer's name written in that could have been remotely assignable.  I've never done it but have heard they CAN be assigned, but it's pretty hard.

 

Good luck.

Permalink Reply by Tiffany Cloud on February 17, 2011 at 3:05am

Thanks - I have done several in an LLC to and haven't had a problem.  I think the issue here is the "INC".  I will let you know how this turns out.  I sure appreciate you taking the time to comment - much appreciated!

Permalink Reply by Smitty on February 17, 2011 at 5:53am

Ahhh, Yes.  Thom is right.  I didn't catch the INC.  I still feel like it shouldnt' matter if it's INC, LLC, etc.  I think they may not want the option language in it.  Each investor is different though.

Permalink Reply by Harold Kramer on March 4, 2011 at 6:00am

Hi-
How did this work out?
I am a seller of an investor property in Florida. Freddie Mac is the investor and Chase is the servicer. I have just run up against the same thing. After Chase had the file for 4 months, all parties came to an agreement- the buyer increased his price, I agreed to a substantial cash contributiuon at closing, and everything was set to go. Then the negotiator came back and said "sorry, I didn't realize the buyer is a corporation (LLC), we can't do a short sale to a corporation.

Permalink Reply by Tiffany Cloud on April 2, 2011 at 12:40am

Harold,

The deal died.  Evidently this particular investor just goes around making offers and had been refused many times over for other various fannie mae properties.  Absolutely no corporations period. 

Permalink Reply by Smitty on April 4, 2011 at 1:33am

Harold,

I still am not sure that just because an LLC purchases the property, Wells is allowed to say no.  It's discriminatory.  Is that the reason you were told?