Replies to This Discussion

Permalink Reply by joe beauchamp on February 3, 2014 at 9:39am

The practical side of this is not overly uncommon. Get the deed signed back to the original owner and you should be back to square one with the bank. The bank will want to be sure that anyone with any potential claim to the property is agreeing to whatever short sale the bank agrees to. Having everything as it was and as the bank expects is the simplest and fastest. You have the note, mortgage and deed. Only the deed has changed, so a change back is simple and fast.

You may have investor problems. If the property has not been inhabited by the owner for a while, FHA will not allow a short sale, for instance. Ginny Mae is anal about the owner never renting the property. Not receiving rent might help.

It would be good to find who the investor is (MERS online might be helpful) and call to see about their criteria, if possible. I used to get the investor by calling the regular customer service (after faxing to them the authorization).

Permalink Reply by Thom Colby CA Brkr 888-391-5245 on February 3, 2014 at 9:40am

I have not done one of these with BofA however I had something similar where a seller basically refinanced with a hard money lender who never paid off the loan and filed a another lien on the property (CA).  I expect BofA will not be cooperative and will likely move forward with due on sale so they can foreclose quicker.  With no taxes or payments made for a while there is no benefit to BofA to allow the short sale.

BTW,  Who is living in the property? The original owner or the opportunist buyer?  How long ago did this "transaction" happen?

Good luck !

Permalink Reply by Bryant Tutas on February 3, 2014 at 9:58am

Much will depend on how the transfer to the "buyer" was done. Was a deed recorded? If not then this is probably not an issue at all. If it was then just have the buyer deed it back over to the borrower then proceed as usual.

Of course bank of America could choose to just foreclose but it is certainly worth a shot. I'd take this short sale in a heart beat as long as the borrower and buyer are both in agreement to do what needs to be done.

And of course they should seek legal advice.

Permalink Reply by ElizabethWeintraub00697006LyonRE on February 4, 2014 at 7:07am

The bank won't care who is in title on the deed for the short sale so you certainly could just start the short sale with the original owner, Owner A. Of course, for your listing, you would need Owner A and Owner B but that would complicate issues for Bank of America. Therefore, the easiest way to move forward is for Owner A to record a quitclaim from Owner B back to Owner A. Technically, you probably could process the short sale with Owner A and record the QCD at closing but you wouldn't have a valid listing contract.