Home Forum Contact Create an Account Sign In Create a Trust

short sale buy back?

This topic contains 11 replies, has 0 voices, and was last updated by Avatar of sstanton sstanton 10 years, 2 months ago.

Viewing 13 posts - 1 through 13 (of 13 total)
  • Author
    Posts
  • #5795
    Avatar of sstanton
    sstanton
    Member

    I can’t locate information on what makes this illegal. I know it is out there. Anybody know where.

    Seller wants an investor to purchase a home on a short sale then sell it back to him at the new price. I want to tell this person he is heading for a view through a barred window, but can’t find documentation.

    Next, what if, (sorry Scott, I now you hate what ifs) an investor purchased the property and we put it into an EHT until the value exceeds the original loan, say 7-10 years from now, then let him buy it back. Would that be an option?

    Stu

    #30030
    Avatar of homesavers
    NULL
    Member

    Stu,
    I am not an attorney of course but you may find your answer in the term, “arm’s length”.

    #30031
    Avatar of dbhenderson
    dbhenderson
    Member

    @sstanton wrote:

    Seller wants an investor to purchase a home on a short sale then sell it back to him at the new price.
    Stu

    I don’t think that is what we are doing. My understanding is that we ARE NOT reselling it to the original short sale seller.

    #30032
    Avatar of mtnwizard49
    mtnwizard49
    Member

    Is it legal or illegal for the previous owner to come in as the Lessee in a EHT transaction via short sale?

    #30033
    Avatar of sstanton
    sstanton
    Member

    Thanks, Dave, from what I understand, your are right, but, that is what this guy wants and I believe that it is not legal. I’ll try Homesaver’s thought and put “arms length” into the search.

    Gary, that is the question. I would really like to know the exact answer.

    Stu

    #30034
    Avatar of mtnwizard49
    mtnwizard49
    Member

    Since it’s a lease and the previous seller is not on title and has no equitable interest in real estate, there is no sale, IN MY OPINION.

    #30035

    @mtnwizard49 wrote:

    Is it legal or illegal for the previous owner to come in as the Lessee in a EHT transaction via short sale?

    My understanding and experience is that in most jurisdictions that it is ILLEGAL for someone to…

    a. Bring a borrowers loan current, be deeded the property, and lease the property to the original borrower with a buy back option.

    b. Have an Investor “Purchase” the property outright and lease the property to the previous borrower with a buy back option.

    The Correct and Legal Solution is…

    a. Have the owner place their property in an EHTrust.

    b. They remain not only the SB but the RB too.

    c. Leave all their remaining equity in place. In other words, they get to keep 100% of any equity between the FMV at time of inception of the Trust and the balance of their loans.

    d. Bring in IB that contributes enough money to the trust to pay all the closing costs, contingency fund, funds needed to bring the loan current and an extra $1200. Why $1200? Because you also need to reduce the SB/RB’s payment by $100 per month for at least the first year.

    By doing it this, if you need to EVICT the original owner/borrower, they cannot file a successful claim that you took advantage of them.

    Although this is the more correct, in my opinion, and legal way to do Foreclosure Bailouts, I still wouldn’t do it and leave the owner/seller in the property. Instead, I would either recommend our new Short Sale program or walk.

    Or…

    Do the SS program and leave the previous owner in the property as a new RB with the right, not option to purchase the property at a future date. Thus, no options and no sale. Nothing but a straight rental with a possible buyer down the road.

    #30036
    Avatar of sstanton
    sstanton
    Member

    Since I am having some communication issues with the main office. Nothing bad, just the way it is. Can some one tell or give me the needed documents to get this rolling? I am sitting on several SS opportunities.

    S

    #30037

    email Dave Salcido directly. dave(at)landtrust.net

    #30038
    Avatar of spunky
    spunky
    Participant

    Scott,
    I have a short sale buy back in Cornelius, NC, but I am not in the SS program, can I still be a ground partner for someone who is?
    Seller is 9 months in arrears at $1890 with BOA. and can pay only $1550/mo

    #30039

    @spunky wrote:

    Scott, I have a short sale buy back in Cornelius, NC, but I am not in the SS program, can I still be a ground partner for someone who is? Seller is 9 months in arrears at $1890 with BOA. and can pay only $1550/mo

    Absolutely. Bill, Dave or Me would be glad to work with you.

    #30040
    Avatar of ybaggi
    ybaggi
    Member

    1) DISCLOSURE:
    in RE and especially in the (pre)foreclosure industry,
    you cannot disclose enough. It’d be prudent to disclose
    what you had for breakfast that morning and what
    color underwear you’re wearing today… that’s how bad
    it is.

    So you go ahead and do a short sale and tell the short
    selling lender the borrower is going to stay in the property
    (as owner or lessee) and you have zero chance of getting
    the pay off letter approved.

    Now the alternative is to not disclose that and you’ll end up
    breathing filtered air for quite some time with free food, sex
    and chores…

    FACT: Everyone seller would like to stay in their home and
    pay less (if anything)
    get a principal reduction (or even wipe it out)
    or lease the property back.

    Now lets say you fast forward 10 years and your happy tenant
    has lease the property back from you for that period of time
    and property values have recovered and the market is healthy.

    now that ‘tenant’ sees that YOU are sitting on $200,000 of
    what he believes is ‘HIS’ equity.

    Tell me guys: how is a judge and jury going to side?
    do you want to be in front of them and tell them you’re
    going to cash in on the equity?

    THere is no justice in this. It sucks for the borrower but
    BEST PRACTICE is to have them out no matter what.

    There is the ‘Brown Case” that ruled this way but I don’t know
    what district it was nor what year. Lou Brown told me way back
    then (but it’s not him…;).

    THere is however a program where upside down owners
    who HAVE NOT DEFAULTED on their loans can get a short
    sale of their home and a lender will refi for 90% of the
    current market value. All disclosed, all clean. This is
    a fee based service since there cannot be a spread
    between the buy/sell because there is none…
    But this probably don’t apply to any of your prospects.

    If you haven’t done a deal and you ‘think’ that’s
    all the borrowers are going to accept, guess what?
    it’s YOU. yes it would be nice, but we’re not
    Santa Claus.

    All the best, get the borrower out, new owner in,
    cash a fat check and move on.

    #30041
    Avatar of areyes
    areyes
    Member

    It’s called a short-refi into a 90% FHA loan which applies to primary residences. Works for properties that are overencumbered and current on the mortgage.

    Seller may still get a 1099 for the deficiency right? Unless the that mortgage debt relief would cover that or the homeowners file for insolvency.

Viewing 13 posts - 1 through 13 (of 13 total)

You must be logged in to reply to this topic.

Posted in
Contact Form
Your Fullname:


Email Address:


Phone:


Best Time to Call:


Subject:


Your Message:


Security Code:

 

Can't read the above security code? Refresh