I have a question and have googled for weeks trying to get an official opinion on this from someone who might really know. It just doesnt seem to be addressed anywhere. Here it is:
"Affiant further says that there are no agreements or understandings, written or implied, that will permit Seller to remain in the above mentioned property as a renter or to regain ownership of said property at anytime after the execution of this short sale transaction"
This is the wording in my arms length affadavit for my short sale. I know the offer that has been submitted to my lender is someone who is going to rent the property out. When the arms length affadavit was signed and also by the COE there will not be any discussion and there hasn't been and won't be any written agreement, any implication of me renting the property back.
What if I ask the question about the buyer renting back to me after the COE and they would like to do that? I see no way by reading the exact legalese of that affadavit that any violation of that ffadavit has occurred. If the lender was to pursue anything, they would be having to prove something that never happened. Is my thinking correct?
I also think it is written in a way to scare people off from doing that but to those who read it closely who have a bit of a legal mind can see that they know they have no legal recourse in the event a rental agreement truly occurs in the fashion I described. Am I corrrect or somewhat correct or not correct?
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Smitty much better answer than the previous posters. I am the one who would be ulta fearful of a reversal as this short sale is VERY important to me. I would only rent back if I find the bank has no recourse. I think the verbiage in the affadavit has done an incredible job of scaring people off. The banks hired a good law firm to do the legalese to put as much doubt in peoples minds and it has worked. I never see any threads like this anywhere on the net and the few posts I see on this, people are very afraid of that language.
Smitty, I am ready to move on because of the risk that you are talking about and the fact that I would not want to have to pay a lawyer to defend a case that I would probably win. Bank may just want someone to have to pay legal bills to defend themselves.
My real goal is for this thread to go viral and bring this issue into peoples consciousness and have real estate attorneys and other real estate professionals including bankers weigh in on it.
I think until now the banks lawyers in drafting that agreement with that great ambiguous verbiage have done a wonderful job of pulling wool over the collective masses eyes. There is a very good chance they know they can not pursue such matters after COE and have done a great job of scaring people away from questioning. That is why I cant find anywhere a good thread discussing the true legalities of this.
Any suggestions to help me bring this thread viral as opposed to this one website? Last thing the banks want, but it would be great for the consumer.
Bryant, you are not understanding my point. The whole time I am explaining to you that I agree that there can be no discussion, written or implied, between buyer and seller at any time before COE regarding a rental agreement. When someone signs that affadavit and gets ot notarized they are totally attesting to the fact that that has not occurred.
If lenders felt they had the ability to stop a rental deal from being struck say, for example one month after close of escrow, they would have written the agreement to also say "additionally, there can be no agreement after the close of escrow that permits the seller to rent this property." It is one extra line. Why isnt it there? If it was there it would be challenged in court and lost. After losing that challenge in court the banks would be facing everybody remaning silent until after COE and then seeing if a deal could be struck.
As written, the affadavit absolutely prevents what you are saying the purpose of it is. You are correct on that. A deal struck after close of escrow would have no effect on the terms of the sale of the home.
Jeff,
You are correct and I have asked an attorney without paying him and he said I'm on the right track. I would really just like an attorney's complete opinion. Not just one line. I understand most of you are realtors, but I was hoping there might be a real estate attorney who might go in depth on his legal opinion.
Bryant in his last message didn't write out the full line in question. If you just write half of it, it surely doesnt give the full picture.
To Jeff I ask you this. Why wouldnt a universal arms length affadavit letter that is used by most lenders not just say "additionally there can be no rental agreement after the COE."
If you really want to go deep into the line and take out the part about buying back the property the line would say say that "there is no agreement, written or implied that would permit the seller to remain as a renter at any time after the sale is complete." I could sign that affadavit and 2 weeks after COE go back to the buyer and ask if they have rented the property yet. If they tell me they havent and we strike a deal for them to rent it to me, THAT AFFADAVIT WAS NOT VIOLATED. There was no agreement written or implied before the short sale process was complete. That is all that you are signing off on. THAT IS A FACT.
I repeat the affadavit is to make sure there is no written or implied agreement to rent the property back that would influence any decisions on this sale whether it is property valuation decisions, which offer to choose, or whether or not to proceed with a short sale at all. There is a punitive element as well. The punitive element is that the buyer thinks he has to move and has to make plans to move. The odds of a deal being struck to rent it back after no discussion has been had until after COE is next to nil. A seller will usuallly make other plans because he/she has no idea what the intent of the buyer is. The buyer will make other plans because he/she has no idea what the intent of the seller is. Maybe the buyer already has a renter in mind. Maybe the buyer is going to rent it to a relative. Maybe its going to be a vacation home. I don't know what my buyers intent is, but I'm also not going to make any plans. I will have to make a last minute decision about my living arrangement (most people cant do that) and if a lawyer or 2 tells me I am absolutely correct, then I will pursue asking the buyer after COE.
Again Jeff, We are going around in circles. It is not an intent to defraud. If coming to an agreement after COE without any prior communication to buyer before COE constituted fraud, then the affadavit would in plain terms address the issue I am talking about. The affadavit absolutely DOES not address after COE simply because they know they have no legal recourse simply because its not unlawful.
They had smart lawyers write up the affadavit in those words with that verbiage exactly for the reason that is demonstrated in this thread. It is ambiguously written to have the exact reaction it is having in this thread. It worked. It pulled the wool over the massses collective eyes.
I am still looking waiting and hoping a real estate attorney will post on this thread. If you know any on this site please direct them to this thread.
Paul, if you really want to do this and it's that important to you, and it sounds like it is, then go HIRE an attorney and get their legal opinion. If you get any advice on any message board that is inline with what you want to do, and because it's what you want to hear, you proceed with renting it back, then you don't have a chance if the bank finds out. If you hire an attorney and the attorney tells you what you want to hear, then you proceed, perhaps you will have a leg to stand on, when fraud charges are made, because your attorney advised you that way. I don't know.
Good luck to you, I'm curious as to what you find out.
Maybe you should go to an attorney message board if that is what you are looking for. We are just the people who get the short sales approved and are not party to the contracts. What you do after the sale is your business. If you are so convinced the by all means, sell your home as a short sale and then rent it back from the buyer and if you are really convinced that you are correct, call the bank and tell them that you did it.
I would suggest if you are seriously interested in knowing this and not just trolling, you should talk to an attorney.
Paul Jones said:
Actually I would like to hear either that or any other commentary (even to the contrary) from someone qualified to give it. (ie attorney). Yes, someone told me what I want to hear but I wanted to hear discussion of this topic among real estate attorneys or contract attorneys. That was the purpose of me starting this thread and it's still the purpose. Unfortunately it hasn't worked.
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