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Short Sale Rent Banks: Which banks allow them and which ones don't.

Posted by Eric Stevenson on February 1, 2010 at 6:48am in Short Sale Discussions

Short Sale rent backs are a great solution for a lot of people, but a lot of banks have you sign an "Arms Length Affidavit" that doesn't allow it.  From reading through some comments, it looks like some banks allow it, and some don't.  I thought it would be usefull to start a thread where everybody can post their past experiences with certain banks, and post whether each bank allows them or not.   The one I am dealing with now is Wells Fargo and I have found that they do not allow it.   I hope we can make this a nice reference point that we can all share!

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Tags: affidavit, arms, back, length, rent, rental, sale, short, tennant
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Replies

  • Jim Schneider December 11, 2010 at 8:10am
    Terry,
    Could you elaborate on your experience with trying to get a loan mod? There are a lot of people that consider it and would appreciate learning from your experience.
    Thanks
  • Terry Price December 10, 2010 at 11:31pm

    I tried for a very long time to modify the loan with BOA. Finally, out of money, I just resorted to short sale. The interesting thing is my modification would only have saved me a minor amount of money for a whole lot of credit damage.

    Sean Wilder said:

    I have only heard of this with foreclosed properties and deed-in-lieu's. I do know that it is actually illegal in some states, though more research would be needed to confirm which states. Check your own states first. There have been a lot of scams involving rent backs in the past couple years so they are frowned upon in a lot of states. That being said, I think it is hilarious that some of the investors would rather take the loss and let the seller rent it back, when they could have just modified the loan.
  • Eric Stevenson February 14, 2010 at 5:36am
    Thanks Brett! I am definitely interested to hear which banks will and which won't. There is a huge opportunity to get short sale listings and sales here.

    Brett M. Swenson said:
    So far I have only seen Wells Fargo not allow seller rentals. My team has a cash investor pool that is very interested in Seller Rent Backs. We are now comparing payoff approvals and probing different banks for answers. When I have that list I will gladly share it. I am curious to see who else has any knowledge about this...
  • Sean Wilder February 14, 2010 at 5:30am
    I have only heard of this with foreclosed properties and deed-in-lieu's. I do know that it is actually illegal in some states, though more research would be needed to confirm which states. Check your own states first. There have been a lot of scams involving rent backs in the past couple years so they are frowned upon in a lot of states. That being said, I think it is hilarious that some of the investors would rather take the loss and let the seller rent it back, when they could have just modified the loan.
  • Brett M. Swenson February 13, 2010 at 7:19pm
    So far I have only seen Wells Fargo not allow seller rentals. My team has a cash investor pool that is very interested in Seller Rent Backs. We are now comparing payoff approvals and probing different banks for answers. When I have that list I will gladly share it. I am curious to see who else has any knowledge about this...
  • Eric Stevenson February 4, 2010 at 6:53am
    I personally haven't either, but I have been reading a lot about it and I know that some banks will allow it. And when I say "allow it" I mean that in their "Arms length affidavit", they don't have a clause about a rental agreement.

    Bryant Tutas said:
    Good idea Eric. This far I haven't run across any that would allow a rent back.
  • Bryant Tutas February 2, 2010 at 12:32pm
    Good idea Eric. This far I haven't run across any that would allow a rent back.
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