I just had a situation come up on a deal that I was working and I thought I would share it in the hopes it would help someone else out. I represent the buyers who first tried to by my own listing and then we moved on to another home in the same area.
We wrote a contract on a home and specified that the buyers would be using an FHA loan. The seller counter offered and eventually we came to an agreement on price. We setup a quick closing and everything was going way to smooth.
Then we hit a bump, a huge bump. The sellers had let the husbands parents purchase the home and get the loan for them. The sellers then made all of the payment on the home for the last 5 years. Now that the home was going to be sold, the drew up a quit claim deed transferring title of the home from the parents to the sellers. They then filed this deed two days after receiving the contract.
Normally this would not be a problem, but due to the amount of flipping that has been going on for years (when someone buys a home, makes minor repairs and then sells it for a large profit) FHA has a rule that the title of a home must be under the same owners for at least 90 days to get an FHA loan- NO EXCEPTION.
This has caused huge problems in the successful closing of this deal, I will have to tell you later if we are able to work something out.
Please visit me at http://www.stlouisliving.net/
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