Home Tendering Agreements

[Bryan Hancock]

I know of some Phoenix-based investors that submit short sale offers and place people in the house to "guard" it while the bank is goofing around with the offer. They collect "rent" and pay nothing on the mortgage for months while the bank is screwing around with the thousands of files on their desk. These are generally transient folks that pay rent under what the prevailing market fetches in the area. Talk about "shadow inventory." :mrgreen:

Has anyone ever heard of others doing this? It isn't something I even would want to be involved in and I think it is shady, but I am curious to know about the according-to-Hoyle legality of it. If you have a POA from the seller allowing you to do something like this is that trumped by the default somehow? They still own the house until the lender does...right? I am sure there are laws about this, but I don't know what they are.

[Jon Holdman]

Nevertheless, if you're collecting rent, regardless of the details of the rental agreement, and not paying the mortgage, its rent skimming. Every investor loan I've signed has had an explicit "assignment of rents" clause. Now, these are probably homeowners with OO loans, so that may not be covered. I have no idea about specific laws that cover this situation, and I suspect its very state specific. But this is the sort of "investor" BS that ends up resulting in new, anti-investor laws.