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
-----------------------------------------------------------------------------------------------------------------
_____________________________ ______________________________
(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) DateReplies to This Discussion
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Permalink Reply by Christina Conrad on
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Wow..I am not saying any of that.....this is being blown way out there.....I assume most of you have attorneys and from what I have been reading most of you are electing not to take the advice of your attorney....need I say more...I am saying a bank doesn't have the right to do this or that...I'm saying any of that...I agree with everything you are saying..unfortunately burying our heads in the sand doesn't make the addendum any different...it is just like the Bible..10,000 people can read the BIBLE and all of them will have a different view of what they read....I look at things a little differently that most of you on here....One: If I am sick, I go to the doctor and pay somone that has been to school to be a doctor to tell me what is wrong with me..if he tells me I have lung cancer and I choose to ignore that information and I die..then I have no one to blame, but myself..If an attorney gives you advice not to sign a certain document and you do and become liable for 50K then you have no one to blame but yourself....I voiced my opinion on this subject because I thought this was a forum where we express opinions...and I stress the word opinion...to HELP one another out..I am not the enemy, I have merily expressed an opinion that apparently a lot of people disagree with...I respect your opinion, please respect mine....I will not be commenting anymore on this particular topic..each to their own opinion about the addendum and good luck to everyone!
Jeff Payne said:
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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Permalink Reply by Rita Legan CDPE (440) 227-4461 on
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I have a Hold Harmless Aggreement with sellers too but the lender's would need to sign it too no? Of course they will not. Sellers have signed arms length, but never me or my broker. As of yet here in Ohio I have not had this in doing SS over three years now, but as our broker has put this out I am thinking this is being sent from Wells now and may get it with those in process.
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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...Not only the agent ,but the Brokerage.
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Permalink Reply by Jeff Payne on
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Certainly didnt mean to upset you. My attorney has no issue with this affidavit, as long as what i am attesting on it is true. We have no control over what happens in the future unless we are directly involved in it, all we can do is attest to the best of our knowledge the facts that we know.
I was just curious why you thought that Wells Fargo was wrong to have guidelines in their short sale progress, not to argue, just out of curiosity.
Christina Conrad said:Wow..I am not saying any of that.....this is being blown way out there.....I assume most of you have attorneys and from what I have been reading most of you are electing not to take the advice of your attorney....need I say more...I am saying a bank doesn't have the right to do this or that...I'm saying any of that...I agree with everything you are saying..unfortunately burying our heads in the sand doesn't make the addendum any different...it is just like the Bible..10,000 people can read the BIBLE and all of them will have a different view of what they read....I look at things a little differently that most of you on here....One: If I am sick, I go to the doctor and pay somone that has been to school to be a doctor to tell me what is wrong with me..if he tells me I have lung cancer and I choose to ignore that information and I die..then I have no one to blame, but myself..If an attorney gives you advice not to sign a certain document and you do and become liable for 50K then you have no one to blame but yourself....I voiced my opinion on this subject because I thought this was a forum where we express opinions...and I stress the word opinion...to HELP one another out..I am not the enemy, I have merily expressed an opinion that apparently a lot of people disagree with...I respect your opinion, please respect mine....I will not be commenting anymore on this particular topic..each to their own opinion about the addendum and good luck to everyone!
Jeff Payne said:
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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Why would someone who does not own the property and someone who did not hire you sign a hold harmless? I too have just recently seen these with Wells, previously they had a different form that I did not have to sign.
Rita Legan said:I have a Hold Harmless Aggreement with sellers too but the lender's would need to sign it too no? Of course they will not. Sellers have signed arms length, but never me or my broker. As of yet here in Ohio I have not had this in doing SS over three years now, but as our broker has put this out I am thinking this is being sent from Wells now and may get it with those in process.
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Ok, I have no knowledge and no liability, but do I or my brokerage want to go through the legal processes of proving this? I think lenders are trying to put the deepest pockets on the hook. I will rely on my corporate brokerage and their legal eagles.
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On the hook for what? That is what I have been trying to figure out? Not trying to be argumentative just trying to understand what crime I committed when I knew nothing about the transaction being non armslegth and had no knowledge that a buyer that I did not represent was going to resell the property within 90 days or when I knew nothing about the seller agreeing to rent back the property after closing. If I knew any of those things I would not have signed the document.
BTW, just try to tell Wells after the fact that the seller rented the property back without your prior knowledge, they will laugh and tell you they do not care what the buyer and seller did, ask me how I know this :)
Rita Legan said:Ok, I have no knowledge and no liability, but do I or my brokerage want to go through the legal processes of proving this? I think lenders are trying to put the deepest pockets on the hook. I will rely on my corporate brokerage and their legal eagles.
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Rita, I just noticed that you are a KW agent. I have a call scheduled for July 26 with Gary Keller for something we are doing for Mega Camp. I think I will have him take it to the KWRI attorney to get their official response. are you going to Mega Camp?
Rita Legan said:Ok, I have no knowledge and no liability, but do I or my brokerage want to go through the legal processes of proving this? I think lenders are trying to put the deepest pockets on the hook. I will rely on my corporate brokerage and their legal eagles.
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Jeff Payne said:
Rita, I just noticed that you are a KW agent. I have a call scheduled for July 26 with Gary Keller for something we are doing for Mega Camp. I think I will have him take it to the KWRI attorney to get their official response. are you going to Mega Camp?
Rita Legan said:Jeff, This Wells and BOA Affidavit was already reviewed and anotated by KW Corporate Attorneys Nash Law following is KW Corp Response: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.
WHAT TO DO: If you are presented with these documents as a requirement of a short sale approval, notify us immediately and DO NOT SIGN. In addition, if you are currently working on a BOA or Wells short sale, be prepared in advance by letting us know. It is not guaranteed, however we have been advised that in many cases, if a short sale negotiator or attorney is involved, they will close the transaction without these documents. Our market center is working to provide you with resources in this arena. NO REAL ESTATE AGENT IS LICENSED TO PRACTICE LAW IN THE STATE OF OHIO. A simple referral to another agent who is experienced with short sales is NOT sufficient. We highly recommend your sellers seek legal counsel for this service or use a company such as Mortgage Mitigators.
Be particularly cautious when agreeing to short sale addenda. The broker should never be an actual party to the transaction.
Thank you for your professionalism in this area!If you have not gotten this just shoot me your email and I would be more than happy to provide you with the complete email I received.
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Interesting, your Regional Leadership said this? We had something similar last year from KWRI but once we stated our case they changed their mind.
I didnit know that Nash Law firm represented KW, that is not the person we dealt with on a short sale legal issue last year.
Rita Legan said:
Jeff Payne said:
Rita, I just noticed that you are a KW agent. I have a call scheduled for July 26 with Gary Keller for something we are doing for Mega Camp. I think I will have him take it to the KWRI attorney to get their official response. are you going to Mega Camp?
Rita Legan said:Jeff, This Wells and BOA Affidavit was already reviewed and anotated by KW Corporate Attorneys Nash Law following is KW Corp Response: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.
WHAT TO DO: If you are presented with these documents as a requirement of a short sale approval, notify us immediately and DO NOT SIGN. In addition, if you are currently working on a BOA or Wells short sale, be prepared in advance by letting us know. It is not guaranteed, however we have been advised that in many cases, if a short sale negotiator or attorney is involved, they will close the transaction without these documents. Our market center is working to provide you with resources in this arena. NO REAL ESTATE AGENT IS LICENSED TO PRACTICE LAW IN THE STATE OF OHIO. A simple referral to another agent who is experienced with short sales is NOT sufficient. We highly recommend your sellers seek legal counsel for this service or use a company such as Mortgage Mitigators.
Be particularly cautious when agreeing to short sale addenda. The broker should never be an actual party to the transaction.
Thank you for your professionalism in this area!If you have not gotten this just shoot me your email and I would be more than happy to provide you with the complete email I received.
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Permalink Reply by Beverly Cibulsky on -
This has been one heck of a topic! I think we have all learned a little something out of this, which most important.
Keep in mind, members, we are from everywhere in the nation, and Real Estate things tend to vary! Everyone's market is unique! Even the simplest real estate transaction exposes up to liability, and ya know what? you can have all the "disclosures, hold harmless, whatever! It will not protect you from a law suit! It may ultimately help!!! yes, but "any one can sue anyone, for anything! It is the nature of our business!!! (So back to the somebody wants some of my commission discussion!!! we earn every penny!)
Short Sales are not for the weak at heart! They are also different from State to State. This addendum and others like it, is trying to prevent the sleezy dealings that are going on! (sad part is I am not really sympathetic to all these lenders, who may be getting... ummm ripped off now, after because of their practices may have created this mess)
You need to understand that the "arms length" forms, cover all these things that have and unfortunately will continue to happen. Yes, in the past, brothers, uncles, second cousins, good friends, have contracted to buy the property, buy it and the seller rents back. Or the relative buys it, flips it and the former owner and relative split the profit! Then, there are the "investors" that have convinced the seller to deed the property to them, then, stratically "wreck" the home so that when a BPO is done the damage is noted, and meanwhile the carpeting, missing Doors, toilets and kitchen cabinets are in some warehouse!
SO!
-Dont take a short sale where the seller already has a plan for a relative or friend to buy the property
-Dont be party to a transaction where the buyer's agent buyer, wants the seller to rent from them.
-Dont list a property for your former buyer less than the allocated 90days, and God forbid, dont put it in the MLS remarks
-Dont submit an offer to get approved for a buyer who wants you to market it and simaltanmy close, with another buyer at a higher price! (A few Connecticut agents got snagged royally for this, and they truly deserved what they got)
Basically, I would not have any problem with that disclosure, as I am very ethical and choose to not venture into Gray Areas!
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I fugured you were out loading up on some listings!!!! Harry you are always welcomed into the conversation!
Harry Clay said:That's because I have been mostly laying low, & keeping quiet. lol
Bryant Tutas said:And I didn't have to smite one person this week!
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