This comment from Tracy Howard really sums it up:
"If you are found to have circumvented the Affidavit, it can have serious consequences to you -- all the way to unwinding the deal, suing you for fraud, and foreclosing on you without the benefit of a new short sale."
Hi folks. One of our Sellers over at www.ShortSaleSuperStars.com wants to know how to skirt around the 'Arms Length Transaction" requirement of his lender and continue to live in his house after the short sale by renting it back.
The language in the "Arm's Length Transaction Notice" is as follows:
- "Affiant further says that there are no agreements or understandings, written or implied, that will permit Seller to remain in the above mentioned property as a renter or to regain ownership of said property at anytime after the execution of this short sale transaction"
The seller thinks thats:
"This is the wording in my arms length affidavit for my short sale. I know the offer that has been submitted to my lender is someone who is going to rent the property out. When the arms length affidavit was signed and also by the day of closing there will not be any discussion and there hasn't been and won't be any written agreement, any implication of me renting the property back.
I just don't think anyone understands this except lawyers. When I signed the affidavit there was no written or implied agreement. I never spoke to the buyers. At close of escrow there will have been no written or implied agreement. I will have never spoken to the buyers. I am looking for a lawyer to either back up what I am saying or tell me some case law that says I am wrong. You clearly are not a lawyer because you don't even understand what I am saying.
If I speak to the buyers AFTER the close of escrow and LONG AFTER I signed an agreement that said there was no written or implied agreement that I would rent out this property from them (there wasn't a written or implied agreement), there is nothing that says I can't NOW have a written agreement to rent the property from them."
My response was:
You're grabbing at straws. The language is not ambiguous. It's not about the timing of the signing. It's about the fact after closing. But certainly seek legal advice. If it's a battle you want to fight by all means fight it. Fighting it hear won't do you any good.
Your argument is like stating "I promise not to trespass on your property". Then signing an agreement to that affect. 2 days later you change your mind and trespass. When caught you go in front of the judge and try to explain that when you signed the agreement you had no intent of trespassing but then changed your mind. The judge will laugh at you and find you guilty. Make sense?
What do you think?
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