have a short sale where ASC is the first trust. The short sale property has been rented out and the tenant wants to buy it. ASC is saying that they will not accept the offer from the tenant, as they consider it to not be an arms length transaction due to the "business relationship" that the lease creates. has anyone else dealt with this? I was not aware of this definition, and thought that a tenant could make the offer on a short sale. thank you for comments.
Did you write that language in the arm's length??
There seems to be two sides being taken by the commenters. One is that ASC is wrong and one that they are right.
My take is that, yes a tenant / landlord relationship is a business relationship, but so is doctor and patient. There are some "carve-outs" that common sense applies when using the English language.
On the other hand, as I often say, "no one is 'entitled' to a short sale". There is no law that says a short sale must be approved.
Thus even bad decisions can prevail for no reason at all.
Amen Richard LOL
Ron, criminal act? Banks are vindictive and lazy. What is the criminal act for someone buying a property at market value? Only a banker could call that criminal. If you could count on a real absolute value for a property, you wouldn't need the lazy arms-length - which assumes all relatives are thieves and anyone in business with anyone else is a thief, oh, excuse me, unless he is a banker. A bank will not let a seller buy the property because he'd "profit" from it. The seller can buy the exact same value property next door and that is OK. So, basically, the bank insists upon the seller having to pay to move. Is that not just plain vindictive? OK, it is lazy, too - assuming that it makes it more likely that a seller will try to get a low price (unlike every other buyer for a property? Do they all try to pay as much as possible to the bank??).
Why doesn't the bank actually do what they claim to everyone that they are doing and evaluate the property? If they have done so, then what is this criminal thing that a tenant is doing by buying a property at market value and not having to pay to uproot his family and move?
A business relationship? Like with the IRS that the tenant also has to pay? Yeah, I can see why they would be in cahoots to sell the property at the bank evaluated market value. And the crime is what?
What was "criminal" about the transaction. All I saw was that the buyer flipped the property later that day via a closing at another title company. What is "criminal" about this? Did they provide fraudulent information in order to get the short sale approved? If so, what?
So you are saying that in your transaction (i.e. not the poster's) that the buyer purchased the house and then immediately sold it back to the seller? If so, how did the seller buy it back from the buyer with damaged credit? Did the seller turned buyer have cash hidden in a mattress, or was this a short sale (rare) where the seller never missed a payment?
I am trying to look at this situation as both a short sale agent and an investor since I am both. Personally, I take issue with all the documents the banks require in short sales. The analysis should be much simpler: what will net the bank more? If a short sale is better then the bank should value the property and make a decision on the offer based on that alone, not who the buyer is related to, or not. Their #1 objective should be mitigating loss, especially when the loan investor is Fannie/Freddie, which are bankrupt organizations that would not even exist if not for government officials believing it is OK to rob taxpayers to support corrupt and poorly run financial behemoths.
Wow... that action that it was quitclaimed Back to Seller after sale, is a "What were they thinkin' moment." Important b/c I was taught audits are rare, and that is probably what generated the audit. Don't you think?
Thanks for sharing as I kept coming back to how this all came down.
Don't fault me for my views!? Are you saying that a bank with $100K/year valuation experts, managers, executives cannot accurately determine what the value of a property is that serves as the collateral for their loan?
If the bank can determine that value, then that is all that should matter. Determine the value and decide whether to accept the short sale or not. Stop with the volumes of disclosures, affidavits, etc. because we all know they are just paper catch-all CYA's for the banks. Buyers, sellers and agents have no such CYA's when it comes to the sale price.
I believe that a lot of people including many prominent politicians, consumer advocates, attorneys, etc. disagree with Fannie Mae and Freddie Mac because they have been run poorly and recklessly. In fact, most government entities and agencies are run terribly. Go see the IRS, Homeland Security (you know the people who give grandmom a a full body exam at the airport to keep us "safe" while stealing things from our luggage), HUD (complete train wreck and bankrupt), and many more in addition to Fannie Mae and Freddie Mac. I don't think I could even find a single government agency that is run well and cost effectively.
No, I have never told or advised a buyer to buy a more expensive house than I thought they could afford. The buyers would tell me how much they wanted to spend and make that decision based on how much a bank would lend them. I have attempted to talk more than one buyer out of an adjustable rate loan. Most of my business has been on the listing side so for most of my real estate career I had little direct involvement with home buyers. As a seller agent my job was to help the sellers accomplish their objectives by selling their house, not worrying whether a buyer could afford it or not. If a buyer paid too much and suffered then they should be foreclosed or forced to do a short sale.
Are you saying that Realtors, home buyers, home sellers, etc. have some sort of advantage in determining the value of a property over the same banks that have all those highly paid valuation experts, managers and executives?
I have no ill will toward you Ron. I am just tired of the banks crying like babies because they made bad loans. I know the government put in place terrible lending policies, but the banks went beyond that and found ways to profit handsomely (for a short period) by making questionable loans, teaser loans, etc. Now when the s**t hits the fan the banks want everyone else to be responsible when they dispose of a distressed asset via short sale or foreclosure with deeded re-sale restrictions, Arm's Length Affidavits, etc. When I sell a property for my own account I don't make the buyers sign a bunch of forms reducing their ability to make a profit from the property nor certifying any particular non-relationship. I make a decision to accept or reject their offer and move on. If they profit handsomely then good for them. All I worried about when selling was whether I got what I needed. That is all I am asking the banks to do - put on their big boy pants and be responsible for their own actions without worrying about who else is making what.
I read a lot about people who can predict your fate and future by your hand. To be honest, I'm a little skeptical about this. I prefer psychics. I always prepare a list of questions before readings. So, I can ask a psychic a question, and often I get really cool and useful tips, which I then apply in order to change my life for the better.