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.
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!
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.
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.