Comment

Comment by Sue Fitzhugh on January 17, 2011 at 9:46am

Thanks to everyone for their thoughts, ideas, and opinions on my rentback with a HAFA shortsale.  The listing agent actually got the rentback approved today - I am totally shocked.  We were actually hoping the negotiator would have opted for a delay to the settlement date to let the seller get out but at least this lets us close.  In our case, there is another family member living in the house with good credit so we are putting them on the rentback agreement as well to help protect the buyers from potential problems.  I'll feel better when my buyers take posssession.

Comment by Sandy Skover on January 14, 2011 at 3:31pm

I have 2 files with BOA for HAFA.  They are both in "underwriting" and have been there for over 45-days.  One is with Promises and the other with LRC.  Does anyone else have any experience in getting these files HAFA approved?  Both of these home owners were solicited by BOA as "Qualified" for the HAFA program.  One of the files was a couple of weeks short of approval when the homeowner had the $3,000 carrot dangled at her.  The buyer has been hanging in there but is growing very tired of waiting. (They gave us the offer over 4 months ago.

Any suggestions?

Comment by Thom Colby CA Brkr 888-391-5245 on January 14, 2011 at 2:10pm

Folks -

Allowing a short-seller to remain in a property after closing under any circumstance is the worst possible situation you could choose.  Think about it,,, most likely the sellers have not been paying their mortgage for a very long time and have become extremely proficient at prolonging the process of vacating the property.  Nothing will change that behaviour after closing on the property.  First it will be 60 days, then 90, then "whenever".  If you really want to know how to handle this - you or your Broker shoudl contact your E&O carrier.  I'll bet you a snickers bar that they will tell you to get the seller out prior to close of escrow or immediately on that day.

 

Protect your client but also protect yourself,

 

Best of luck,

Thom Colby

Broker

Newport Beach CA

Comment by Mike Horton on January 14, 2011 at 1:28pm

Jeff the key words are "to remain in the above mentioned property as a renter". So I would think that would not be a renter since no compensation passed hands. However, I would be worried about insurance liability, responsibility  for condition of the home (no money to back up a repairs issue), 60 days to move would not be customary in most places and their probably is some state or local law about allowing someone to stay in your home. I think having anyone stay would require a trip to a real estate lawyer to figure out what the liability would be. I agree with your last statment completely.

Comment by Jeff Payne on January 14, 2011 at 11:55am

Mike, what did you think of my idea?  What if the buyers gave the sellers 60 days to move out after closing, they are not renting it and they are vacating, just not on the day of closing.  

The easiest way around this is for the seller to use the $3000 relocation money to RELOCATE!  and fast

Comment by Mike Horton on January 14, 2011 at 11:49am

Most of the arms length have a paragraph that looks like:
"Affiant further says that there are no agreements or understandings, written or implied, that will permit Seller to remain in the above mentioned property as a renter or to regain ownership of said property at anytime after the execution of this short sale transaction. "

Comment by Jeff Payne on January 14, 2011 at 6:20am

Sue, the sellers need to pack their stuff and move!  Get a storage building or something and rent a short term rental.  Surely they would not jeopardize the sale.

One thought though, is there anything that says the seller MUST vacate on the day of closing?  Maybe they can stay there until they are ready to move and NOT pay any rent. Just a thought.

Comment by Sue Fitzhugh on January 14, 2011 at 6:08am

@Michael,  Thanks for your insight.  I went back and looked at the affidavit we all get to sign and it says the same thing so I told the listing agent that she needs to either get it approved or delayed until they can move. I'm not putting my license on the line.

Comment by Michael Schneider on January 14, 2011 at 5:16am

Sue,

I would think not, actually, not just HAFA, but probalby any short sale.

I would think this could (would?) be viewed as a violation of the arms-length or the "no security interest/no occupancy" after the sale.

Comment by Sue Fitzhugh on January 14, 2011 at 4:56am

Does anyone know whether HAFA rules allow a rentback? I'm representing the buyer on a Chase short sale with the sellers getting $3k in HAFA funds and because the short sale was approved much faster than they thought (2 months), the sellers need a rentback before they're ready to move. 

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