If you are a homeowner in Long Island with a house that is upside down on it’s mortgage, you are facing foreclosure and you can’t sell the house and make enough money to pay off the bank lien, you may wonder if you can you quickly sell the house to a friend, family member or a business partner to get out from under it? Maybe you want the home to remain in the family, or you want to help someone get a good deal on the house. The question is, can that family member, friend or business partner take that property off of your hands without violating any laws or violating the short sale agreement with the bank? Unfortunately the answer is most certainly a NO.
During the short sale process, banks and other mortgage lenders are always going to require you to fulfill and satisfy a number of conditions and terms before they agree to let you sell your house as a short sale. One of those conditions will most certainly be that the short sale is an “arm’s” length transaction. The lender will require you to sign something called an arm’s length affidavit, attesting to the fact that you are not short selling your house to a friend, relative or business partner. This arm’s length affidavit is also going to prohibit you from engaging in any sort of back room deals with the prospective buyer. That means there can be no behind the scenes or secret buyback agreements or rental agreements between the parties involved in the short sale.
The lender wants to make absolutely certain that they are being prudent in their decision to award you a short sale and let you off the hook for the remaining (deficiency) balance. The last thing the lender wants to do is to forgive all of that debt during the short sale process only for the borrower to get the house back without having to pay any of the deficiency balance. The arm’s length affidavit contains many strict prohibitions expressly prohibiting the sale or transfer of the short sale property from the distressed homeowner to a friend, family member or business partner, out of fear that the distressed homeowner will, once again, end up with that property or in some may be able to make money on the short sale.
If you are facing foreclosure in Long Island, NY and have a house that is worth less than what you owe on the mortgage and want to learn more about short sales, then give us a call or fill out the form to the right and we can talk about your situation. We will answer all your questions and see if a short sale is the best route to take. There is no obligation and never any cost to you. Take action, be in control, stop worrying!
Give Joe a call at 516-704-7025