Deed restriction with Fannie Mae foreclosure.

[Ivan Reyes]

My partner and I are ready to sign off on a contract. Its a Fannie Mae foreclosure. Its being sold through an agent with a management company.

We just got the contract and article 14 has a deed restrictions. It basically states that the grantee is "prohibited from conveying property to a purchaser for three months from the date of the deed.

Are they basically stating that we have to wait three moths after we close before we can retail the property to our buyer? Has anyone else seen this before.

Thanks.

Ivan

[J Scott]

Originally posted by Gregory Rankel:

I have just started looking into the why behind this deed restriction...

The "why" you would get if you asked the banks is that they are trying to discourage unethical investors who are looking for a quick buck from buying, doing low-quality renovations and quickly reselling to unsuspecting owner occupants.

That may be true. It's also likely true that the banks don't like the fact that individuals have the opportunity to profit (sometimes greatly) off of their non-performing assets, and they are trying to limit the ability of private citizens gaining on their loss.

Obviously, I would never expect anyone in bank management to admit this.

...and I plan on finding the 'who' in this process who has authority to rethink the logic.

It's less logic and more ego/emotion. I'm quite certain those who make these decisions understand the impact; I'm also quite certain that they have no desire to change the process.