FHA Pre Foreclosure Sale And Arms Length Transaction

By
Real Estate Broker/Owner with Tutas Towne Realty, Inc and Garden Views Realty, LLC BK607690

Orlando florida short sale specialist

Hi folks. I was recently asked about FHA and whether or not they allow a non arms length transaction with their Pre Foreclosure Sales. Depending on the type of short sale and who the investor is. There are many guidelines we must follow. Anything outside these guidelines require an exception/varriance. ALWAYS play within the guidelines if at all possible. This makes the Short Sale easier. Spend time working the deal and not working on getting exceptions. FHA PFS has very specific guidelines.

Anyway.......

Hi Bryant:

I am coming to the real EXPERT for a question I am hoping to get your help with.

I have 2 FHA approved ATP files.  My question to you is the following:

·         I obviously represent the seller and so I am the listing agent.

·         One is a Wells Fargo deal

·         The other is a BOA FHA deal

·         Are you aware of an issue with either of these lenders, with the  above type specific loans, if a family member of mine (same last name) were to buy the home?

·         I am trying to figure out if A.) they would allow it and B.) if it were to be considered an ALT.

·         And of course, if they did allow it would they still pay a commission.

I would value your thoughts when you have time.  Thank you!

Hi Bert,

From HUD:

Arms-Length Transaction – Mortgagors and mortgagees must adhere to ethical standards of conduct in their dealings with all parties involved in a PFS transaction. The PFS must be between two unrelated parties and be characterized by a selling price and other conditions that would prevail in a typical real estate sales transaction

Use of Real Estate Broker – The services of a real estate broker/agent must be retained to market a property within 7 days of the date the approval to participate is granted. The broker/agent must market the property within the pre-established time frame and list the property for the established sales price. The broker/agent selected should have no conflict of interest with the mortgagor, the mortgagee, the appraiser or the purchaser associated with the PFS transaction.
 
Any conflict of interest, appearance of a conflict, or self-dealing by any of the parties to the transaction is strictly prohibited. A broker/agent shall never be permitted to claim a sales commission on a PFS of his or her own property or that of an immediate family member (e.g., spouse, sibling, parent, or child).

Short Sales are a whole lot easier if we know what we have to deal with PRIOR to listing the porperty. Find out who the Short Sale Servicer is and what type of Short Sale it is. Then just head over to http://shortsalesuperstars.com and look for the info you need to handle this specific short sale. Here's where to search for Short Sale Lender forms and guidelines.

I hope this helps.

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 Tutas Towne Realty, Inc handles Florida real estate sales, Florida short sales, Florida strategic short sales, Florida pre-foreclosure sales, Florida foreclosures in Kissimmee Florida Short Sales, Davenport Florida Short Sales, Haines City Florida Short Sales, Poinciana Florida Short Sales, Solivita Florida Short Sales,  Orlando Florida Short Sales, Celebration Florida Short Sales, Windermere Florida Short Sales. Serving all of Polk, Osceola and Orange Counties Florida. Florida Short Sale Broker. Short Sale Florida.

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