I have a family member who’s spouse has been out of work and can no longer afford house on 1 income. they paid $1000 to some one to renegotiate their loans for them. these people told them to not make payments while negotiating was in process and they never heard from them again. they have 1st and 2nd mtgs. that totalled 75k when they bought 5 yrs ago on 80/20 - 100percent financing deal. todays market it is worth 50k and needs 5-10k repairs to rent for 600-700/mo. have not made payments in 5 or 6 mos. looking to file bankrupt. is this worth talking to lenders about and/or should i stay away because of relation? :help
It does not matter who you are if you are processing the short sale. For all the bank cares the neighbors dog can process it. (As long as they are authorized by the homeowner). If you are purchasing the property yourself it might be a different story, but you did not specify your exact relationship with the homeowner.
I believe your concern is arm’s length transactions: The concept of an arm’s length transaction is to ensure that both parties in the deal are acting in their own self interest and are not subject to any pressure or duress from the other party.
You can get away with this with many banks, depends on many factors.
I have to disagree just a little…
My experience is each lender looks at “Arm Length” differently… Some think it is fine that the buyer is processing the Short Sale and some do not.
Some lenders go way over board and think it is “Fraud” for a Buyer who is also “The” agent processing the Short Sale. Although they cant tell me why… Maybe it just doesn’t seem “Fair”.
I always explain that is why they have BPOs and staff to sort it all out.
Here is the Arms Length I use…
All Parties to the contract to purchase aforementioned property dated:
That this is an “Arm’s Length Transaction” and that no party to this contract is a family member,
business associate, or share a business interest with the mortgagor.
Further, there are no hidden terms or special understandings between the Seller or Buyer or their
Agents or Mortgagor.
That neither the Buyers and Sellers nor their Agents have any agreements written or implied that
will allow the Seller to remain in the property as renters or regain ownership of said property at
any time after the execution of this short sale transaction.
The with the sole exception of payment of Agents’ Commission, neither the Seller, Buyer nor
any other parties to this transaction shall receive any proceeds.
I am not a Realtor, was actually of thinking of buy and hold if the #'s worked. Owners are daughter and son/law.
Unless they have another buyer, I would say its worth a shot. Especially if your daughter has a different last name because of the marriage. What bank or lender holds the lien?