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Yes....one of our sellers is now happily the tenant at a short sale we closed...not a problem....the lender did not require any documentation as to family they were not....no collusion...just able to afford rent and not the mortgage and they all lived happily ever after.
Fannie Mae and Freddie Mac are starting to investigate these I've heard. If you sign the arm's length affidavit that you are not renting it out and you will, that is considered fraud. Why can't they just let people help each other??
Jeffrey Smith said:
Once the deal is closed, it's none of the bank's business what the new owners do with the property. I've had 2 shortsale deals where the seller has stayed and rented back his place from the new buyers.
It also states that there is no hidden agenda. I think that covers everything else. That's my problem right there!
Bryant Tutas said:
Jeffrey, Are you and the parties involved just ignoring the "arms length transaction" form that you MUST sign? If you are signing it you are agreeing that this will not happen. If you are not signing it the lender won't close. Signing it and ignoring it is fraud. So what's up?
Now of course this may not be the case with all lenders.
I find that hilarious considering they had a program where they were allowing sellers that were foreclosed on to stay in the property as tenants.
Kelly Dix said:
Fannie Mae and Freddie Mac are starting to investigate these I've heard. If you sign the arm's length affidavit that you are not renting it out and you will, that is considered fraud. Why can't they just let people help each other??
Jeffrey Smith said:Once the deal is closed, it's none of the bank's business what the new owners do with the property. I've had 2 shortsale deals where the seller has stayed and rented back his place from the new buyers.
Interesting points here. As for the affidavit, what I wonder is, what would the banks seek for “damages” if they did persue going
after someone who signed the affidavit but then rented back. Had they
not signed the affidavit, would the bank have made more/lost less
money? I certainly don’t think so. I am anxious for someone to force
the issue and have it brought to courts. I don’t see banks finding
out(A), and (B), if they did find out, would they really want to take
it to court which could end up with a judgement not in their favor that
could create a wave of strategic defaults for people to stay in their
home for less money?
I was pondering the idea and shot this vid with an attorney: http://www.youtube.com/watch?v=Nex_q-E7tO0
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