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Short Sale Lender's Definition of an Arm's Length Transaction
 
I recently received an affidavit from the seller's bank, Ocwen, requiring both agents and both seller and buyer's signatures. 
The affidavit contained these 4 affirmations:
•1.        This is an "Arm's Length Transaction" and that no party to this contract is a family member, business associate, or share a business interest with the mortgagor.
•2.        Further, there are no hidden terms or special understandings between the Seller or Buyer or their Agents or Mortgagor.
•3.       That neither the Buyers and Sellers nor their Agents have any agreements written or implied that will allow the Seller to remain in the property as renters or regain ownership of said property at any time after the execution of this short sale transaction.
•4.       With the sole exception of payment of Agents' Commission, neither the Seller, Buyer nor any other parties of this transaction shall receive any proceeds.
I am told that the affidavit will prevent the buyer from receiving any allowance from an agent in the transaction, both on the HUD and outside of closing. 
Now I understand the intent of this affidavit.  Lenders want to be absolutely sure, or at least appear as if they can be to enforce all rules and restrictions ... more

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