Arm's Length transactions. BEWARE! Remember if it sounds to easy to work out with a short sale, then there is probably something wrong.
A few months back Baby Bear called Broker Bear to see about placing his home on the market as a Short Sale. Baby Bear had not made payments in about a year.
Being the good little Broker that he is Broker Bear went over and met with Baby Bear. During the meeting Baby Bear mentioned that Papa Bear lived next door and Grandma Bear lived two caves down. Baby Bear wanted to know if either Grandma Bear of Papa Bear could purchase his cave at a reduced Short Sale price.
Hmmmm......it sounded like a great idea but unfortunately the Lender, Country Cave Bank, said "No, they can't do that. It must be an Arms Length Transaction".
Oh well....Country Cave Bank sucks!!!
So Broker Bear placed the cave on the market and worked towards finding a Buyer. After a few price reductions and several months later a Buyer Bear made an offer on the cave. Country Cave Bank had a mortgage on the property for $175,000 and Buyer Bear made an offer of $50,000!
This offer was very much in line with what caves on this side of the mountain were selling for so Broker Bear suggested to Baby Bear that he should accept Buyer Bear's offer.
BUT......Baby Bear said "NO". Baby Bear, after talking to Papa Bear, decided to take the cave off the market and let it be foreclosed on. Then once it comes back on the market at a foreclosure price Papa Bear will buy it back for Baby Bear.
Broker Bear gets squat. Country Cave Bank will lose more money.
Baby Bear, Grandma Bear and Papa Bear can live happily ever after on their side of the mountain.
I wish I could say this was a fairy tale....but it's not. Smart Bears or Scamming Bears? What say Pooh?
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***The content of this blog is solely my opinion***