Situation: Seller is 10k in arrears, payoff amount is approx. equal to the home's value... but the tenant will do almost anything to stay in the home. Sub2 isn't an option (I'm not willing to front the mortgage back payments) and mortgage payments are too higher, so we're considering short sale. Lender is Owcen, who I have heard mixed reviews on.
I'm not ultra familiar with the process, so I don't want to set myself up for this to not work out in the end.
1) Can I simply rent the home back to the seller after the sale? Will be bank require paperwork to prevent this?
2) Can I sell him a lease-option deal on the home, after the sale? Is there a required "cool-off" period before the seller can get involved in the property again? A minimum price? I imagine this gets fuzzy real fast, considering that the lender would forgive a ton of debt, just for him to repurchase the home for a lower/equal price... Obviously he'd have to recover his credit, but I'd say the situation makes a pretty good lease-option tenant.
Nope. The short sale documents will contain an Arms Length Affidavit stating there are no agreements between the two of you, and specifically that the owner can't rent the house back. You're playing with loan fraud if you try to circumvent it.
Ahh yep that isn't really something I'm interested in messing with. Too bad, still may be a viable investment for me, but looks like this guy won't have any options for staying in his home. Lis pendis was already filed.
Just in case anything thinks the lender won't check...google, "Minerva Sanchez" in the Modesto/Stockton area. She's in Federal Prison for short sale fraud. P.S...I was the lender.
Join the Largest Real Estate Investing Community
Basic membership is free, forever.