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Why will banks approving short sales not approve "private financing"?
We list a lot of short sales every month at
GaRealtyGroup | 2ShortSaleGuys, we are currently working about 35 listings right now.  A lot of times we get the short sale listings approved and then have to wait on the buyer's financing to get approved.  As we negotiate the transaction between buyer's and seller's we make sure it's disclosed where the buyer is getting their funding from.  THIS IS VERY IMPORTANT!!!
With as much Mortgage Fraud that has went around since the real estate market has fallen, banks are already taking a "hit", the banks holding the loans need to be reassured that they aren't taking anymore of a "hit" from inside deals going on between buyer and seller.
We had an instance this week that we negotiated the transaction about 30 days ago.  The offer went binding with the buyer obtaining a USDA Rural Development loan.  When we got the approval this week, the buyer decided that they were just going to obtain "private financing".  I explained to their buyer's agent that private financing is out of the question as the mortgage lender must know where the money is coming from.  The agent was flabbergasted as to why I would ... more

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