Buying Sub-2 does not constitute bank fraud
Posted by OC Andy on November 14, 2007 at 20:52:23:
In Reply to: Wholesale a Short Sale?
Posted by Cal Jammer on November 14, 2007 at 12:41:03:
Cal:
The "bank fraud" that the "many people" are probably referring to is their misinterpretation of the Garn-St. Germain Act of 1982 which qualifies certain conditions under which title to a parcel of real property may be conveyed without triggering the DOS clause contained in most mortgages and DOT. The Garn Act does not prohibit conveyences under a sub-s purchase but instead validates a lender's ability to accelerate the loan if they discover that title has transferred to a new buyer.
If the Garn Act stated otherwise, there would be very few sales of real property with AITD, Sub-2, or "Take over my payments"-type of financing. Don't know about your area, but where I am, these happen every day of the week.
As far as your short sale assignment of contract idea, it sounds like a great move on your part.
I have never done one but the lenders that I've seen approve SS want a ready willing and able buyer with a signed P&SA with very limited contingencies (financing and inspection) and no "and/or assigns" written into the contract, but if you can get them to agree to this contract as well as a simultaneous close, go for it.
BTW, who in OH is frowning on these simultaneous closes. I can understand either the title Co. or escrow looking at this twice because of the potential liability or even the lender because of a potential seasoning issue or is it a State agency?
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