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Short Sales: Is Renting or Buying Back a Short Sale Mortgage Fraud?
IL – In many cases, short selling your home and then renting or buying it back is considered mortgage fraud. Because loan modifications are so difficult many homeowners are considering selling their home and then renting it from the new owner. Many homeowners look at this as the best way to get their loan balance reduced. "I owe 400k, my house is worth 200k, and the bank won't reduce the amount I owe on a loan modification. I'll just sell the home to my friend, rent it from him, and then but it back in 2-3 years after I fix my credit", they think to themselves. Click here to discover how other sellers successfully did a short sale and avoided foreclosure. The Bankers are afraid that if this is allowed, then everyone will want to short sale their house and then rent it from the new owner. To discourage this, some banks are now forcing everyone involved to sign affidavits before they will approve the short sale. The affidavit says something similar to the following: "There is no agreement, oral or written, between the seller and buyer which allows the sellers to remain in the property as tenants or to regain ... more
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