Quote:
Originally Posted by rudyrunner
My friend has a house with a HECM. She wanted to short sale it in benefit of her niece (no length arm).
Appraisal price came higher than niece's offer but lower than principal balance. Her niece's realtor ask my friend to leave the house so her niece can buy it in 45 days.
Is the Realtor right and what is going to happen?
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It's highly unlikely a bank will knowingly authorize a short sale between an owner & their niece.
Selling to any family member is not an Arms Length transaction; according to Freddie Mac it's considered fraud.
Combat Short Sale Fraud with an Arm?s Length Affidavit - Freddie Mac
Short sale guidelines do vary, depending on the investor or servicer. But abandoning the property in order to expedite the sale is an equally risky proposition.
Many servicers' guidelines call out abandonment as cause to
deny a short sale, & they then simply move ahead with foreclosure. FHA ATP (Approval to Participate) guidelines especially frown on abandonment.
If your friend is working with a Realtor who is knowingly encouraging a non Arms Length transaction, as well as abandonment simply to expedite...I'd suggest your friend seek a 2nd opinion from a more knowledgeable short sale expert working in your neighborhood.
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