It is an all too familiar scenario: Short sale seller is caught off-guard by the quick offer and can't find suitable housing in time for closing.
I have an FHA Seller who is about to bail on our current offer because she can not find a place to rent so quickly. I did explain everything to her when we first started and I have offered to help find a rental. But reality set in when we got the offer.
Our Buyer is an investor who is willing to do a short term leaseback.
I am fully aware of the Arms Length Affadavits that prohibit business relationships between Buyer and Seller. However, I recall that sometimes, a short-term leaseback is allowed under circumstances where it is not reasonable for a seller to vacate so quickly.
Wells Fargo can not provide me anything in writing that prohibits this.
Can anyone clarify whether or not FHA has any written policy?
Replies
Hi Drew,
I looked into Wells Fargo's' version of the SS Affidavit and it does not specifically allow for a rent back period that I could see; however, I currently have short sales running with Indymac x2, Sutrust and Homeward and all three SS affidavits have a 90 day rent back clause written in. The practice seems to be more common now with most servicers/lenders I have dealt with.
I closed a WF Short Sale last March that was a 90 day rent back situation; however, I don't remember specific language at the time prohibiting the practice.
I don't know if that helped or not.
Good Luck!
Thanks for the response. I have yet to hear anything more from WF. I went back to another WF FHA short sale I did a few months back and there was a generic Arms Length Aff in the file. It specifically prohibited a leaseback of any kind. Though I swear I had a HAFA short sale and they did allow up to 90 days.