Can a family member buy my short sale
Can a family member buy my short sale? In property market, there is a short sale service. The short sale happens when the lender allows the borrower to sell the house for less than the amount due on the mortgage. However, most of the banks do not allow this practice even though it may be able great for a relative to offer to buy your property.
Facts
Usually most banks do not believe to approve a short sale to family number because sometime there is possibility of collusion for giving the family member a discount. Hence, to avoid this practice the banks require the borrower to sign an “arm length” contract. This contract consists of the prohibition the sale of the property to family members or business associates.
Considerations
The bank will investigate the reason for the short sale and the terms of the transaction. The bank will not look who buys the house but they still will investigate them. The banks will investigate to the borrower’s financial and payment histories.
Warning
Mostly, if you want to sell your house advisable to do not make short sale to a relative because it may seem you are trying to deceived the lender even though you are really honest to help your relative. For example; someone can sell his/her house to the relative when he/she knows that a relative offers higher price for it. Or the relative could quickly resell or “flip” the house for a profit. Federal Law see it as a crime because seem likes to deceive a lender or withhold information.
So it is better to not buy a short sale because there is a risk such as you looks try to deceive a lender. Aside, the lender will not allow you to do this practice. So it will safe for you to sell your short sale to the other person.
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