complicated arms length---is this legal or will hud allow this?

Complicated...

FHA short sale.

The real estate company representing the buyer both are LLC's. They both have members that are members of both companies. HUD has stated that there is a conflict of interest and will not pay the buyer agent the commission...only my side as the listing agent. Buyer agent is throwing a fit stating that just because both companies have the same physical mailing address, that both buyer and buyers real estate company have members that are in both LLC's, that there is no conflict of interest and he can have his commission. Has anyone else had this or got it approved?

As of now, he refuses to close the transaction since he will not get paid a commission. We were supposed to close today and foreclosure sales date is just weeks away...

0 members like this

Replies to This Discussion

Permalink Reply by Craig Bartels on February 6, 2015 at 6:14am

quick update, the buyer agent is stating that HUD doesn't care whether they have common management, only if they have "common ownership". I would think if the COO of the buyer agents company is also the COO of the company purchasing the property, that that would be considered "common ownership"...?

Permalink Reply by Craig Bartels on February 6, 2015 at 6:27am

but what is considered financial interest? Being a member of both llc's?

Permalink Reply by Dean E Eshelman, CPA, CDPE, IRES on February 8, 2015 at 8:22am

Absolutely correct. Same "members" of each of the LLC's is common ownership and under HUD rules a conflict of interest. The same mailing address alone would not be an issue, but sure that tipped HUD off to look a little further.. So no commission will be paid to the buyer side. The Real Estate Company should have known this. Has the real estate company not done any short sales?

Permalink Reply by Craig Bartels on March 3, 2015 at 5:40am

This is Main Street Renewal and they are buying thousands of homes in multiple markets in the United States. I don't know how on earth they couldn't have ran into this in the past....

Permalink Reply by Kevin - Greenville, SC on March 3, 2015 at 6:02am

quite a few of the 'guidelines' that are enforced/strongly recommended at the servicer level are not a result of some investor/insurer guideline but as a result of their counsels advice for 'best practices' or their incorrect interpretation of such guidelines.

RSS

Welcome to
Short Sale Superstars

Sign Up
or Sign In

Or sign in with:

Members

View All

Badges | Report an Issue | Terms of Service

Short Sale Superstars, LLC and www.ShortSaleSuperstars.com does not endorse the real estate agents, loan officers, attorneys, real estate brokers and other participants listed on this site. These real estate profiles, blogs, blog entries and forums are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a short sale. Short Sale Superstars, LLC takes no responsibility for the content on these pages that are written by the members of this community.