Got Deed. Can I Still Do A Short Sale?
I recently got a deed from a seller. i am fixing up the house and plan on reinstating the mortgage until i sell it. the mortgage is in the hands of an attorney and i do not want them to know i have the deed in my name for the due on sale clause. I do want to try and do a short sale but not sure if it will open a can of worms (like them pulling title). has anyone had any experience with this? any input would be appreciated.
thanks-
Ironic eh? I just posted a similar topic right before you. From what I have read if the bank finds out, they just will not short sale with you. But if they do not find out, you can short sale like a normal one but technically you are commiting "fraud" of some sort because the HUD-1 and some paperwork would be false because the seller isn't technically selling it to you. But normally you will not be found out. I would like to hear from someone who has had the deed recorded and still short sold.
Quote:
On 2004-11-10 22:07, jkid wrote:
I recently got a deed from a seller. i am fixing up the house and plan on reinstating the mortgage until i sell it. the mortgage is in the hands of an attorney and i do not want them to know i have the deed in my name for the due on sale clause. I do want to try and do a short sale but not sure if it will open a can of worms (like them pulling title). has anyone had any experience with this? any input would be appreciated.
thanks-
Here are some things to consider when 'grabbing the deed' then trying to short sale....
Firstly, failure to disclose, mislead or lie with respect to a material fact on a HUD1 governed transaction is generally considered to be fraud.
While some mortgage loan servicers don't much care if the title has been transferred... some, including the giants, very much care.
In fact, they'll ask that the mortgagor declare, in writing, that they have done nothing to cause a transfer of interest in the subject property prior to short sale.
That includes giving away their deed... whether the deed is recorded, or not.
The very act of executing a deed flies in the face of short sale criteria.
In those situations, if the mortgagor fails to disclose/admit that he/she has conveyed ownership interest... that's a lie. If the Purchaser causes or encourages the mortgagor to lie...the Purchaser is complicit in this fraud.
Will you get caught? Probably not.
However, if the lending institution audits their transactions for compliance.. there is a possibility that the act will be discovered. What would happen?
That depends. The parties to the transaction could be asked to reimburse the lending institution for any financial concessions made, plus interest and fees. An eager beaver prosecutor might file charges.
It's best to know the ss criteria for each mortgagee before you set out to structure the deal. If they permit a deed transfer, fine. If they specifically prohibit extending short sale consideration to a mortgagor who has conveyed ownership interest in the mortgaged property... then
proceed at your own risk.
In my opinion, the singlemost common error inexperienced speculative investors make are to combine acquisition techniques without having the prerequisite understanding of how those techniques interact with each other.
Generally, grabbing the deed and short sales don't mix well.
[addsig]
thank you both for the info. i called the attorney and requested a short sale package to be sent out. they called it an application. i also requested the reinstatement figures. i guess when they send the application i will find out what it is they want. per the attorney i know they need a hardship letter and a purchase agreement. i will keep everyone posted on how things go.
I also heard that it might be possible to purchase the mortgage from the mortgage company at a discount instead of having to sell the property. Ruman this might be another avenue. any thoughts on this anyone?
shortsale pro- how did you learn about short sales? any recommended training or courses?
is that a book "the art of short sale aquisition" i would be interested in checking it out.
"shortsale pro- how did you learn about short sales? any recommended training or courses?"
I've been working in the foreclosure niche and doing shorts for about 25 years... long before they became fashionable...about 15 years ago I helped devise an experimental program for the then largest mortgage loan servicer... working in conjunction with FNMA to expedite preforeclosure sales, and preforeclosure short sales as an alternative to foreclosure.
Because most of what's out there is more hype than reality.... I wrote and have revised A Short Sale Primer as an introduction and foundation into the art of short sale acquisition. The more you read, the better able you will be to determine what is real... and what is nonsense.
I'd suggest that you not limit yourself to one type of acquisition technique... learn as many as match your exit strategy... keep reading.