Originally posted by Alex Locklear:
One of the terms in this addendum states:
"The parties agree that this short sale transaction will not constitute appraisal fraud, flipping, identity theft and/or straw buying".
I'm stuck. Surely people are buying and reselling wells fargo short sales. How do I get around this?
Thanks in advance for any help!!
This clause is added protections for the lender and their investor against schemes that could defraud them.
1. If the B buyer is actual individual or entity authorized using wet funds to close then there is no straw buying or identity theft.
2. If you have disclosed you are an investor and that you intend to make a profit and you have not colluded, influenced or coerced anyone to make false claims or actions, then it is not mortgage fraud.
Flipping on the other hand is where your going to run into problems.
Option 1. Courtesey of Justin S. of BP, you should e-mail the negotiator and request clarification of the "flipping" and reiterate your an investor that intends to buy and sell and your title company will not issue a title policy because the language in the SS addendum is too ambiguous. Say... you need to have the right to resell the property once your on title.
Hopefully, you will get a response saying it is okay to flip the sell the property or something similar.
Option 2. Send in the SS addendum signed with a written addition stating that your are an investor intending to make a profit and are invoking your rights to resell the subject property once your on title.
If they issue the approval letter, then they have accepted your additional provision.
The clause is, in my opinion, is intended to keep investors from doing simultaneous closings. However, due to its ambiguity, it has a side effect that keeps investors from doing back to back closings as well ans possible any reselling activity.
Any lawyer will telll you, once your on title, the former lender cannot dictate its policies. The problem is, not many of us will be on title long enough to excercise those rights becuase the titel comapnies, whom are in bed with lenders, are simply not going to issue title insurance becuase of the perceived risks.
Once you have obtained a response under one of the options above, take it to your title company to see if they will help you will a double close.
Option 3. If, after you have tried 2 and 3 to no avail, you could contact your attorney to have him right an opinion letter. This is expensive and has not worked out well for me.
Option 4. If using your own funds, you can use two separate title companies. One to close A to B and th other to close B to C. This came from my own attorney becuase, again, once your on title, they cannot dictate those restrictions.
Option 5. Go A to C and move on.