I was reading emails from one of the boards our company belongs to and this one caught my attention right away.
This issue has been the talk of the community both here on Active Rain and outside of Active Rain. Recently Richard Zaretsky posted two appropriate blogs on this issue, they are: Short Sale Flips - Title Insurance Prohibited and Short Sale Flip - Questionable Methods.
The news article starts out by saying: It may be a bit tougher now for investors to flip short sales for big profits.
Attorneys' Title Insurance Fund notified its 6,000 member lawyers this week that it will not insure deals made with a popular - but controversial - method for closing flips of short sales. A short sale occurs when a mortgage holder agrees to allow a home to sell for less than the mortgage balance so that foreclosure can be avoided. The full article found at Tampa Bay Online can be read here Home short sale flips nixed.
We as agents need to be aware of what the true ownership of the property is that our buyer wishes to purchase. These types of deals may only cause headaches down the road and that is certainly not what we want in this market. There are ethical ways of selling a home by way of a Short Sale. When I read about this type of scheme, it made the hair on the back of my neck stand up and with good reason...I didn't think it was very ethical (but that is my opinion).
If something just doesn't seem right, then it should be questioned. Get all the facts so that you can ascertain what truly is correct. It is not worth losing your license and career over something like this.
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