Cash to seller in short sale legal?

[gregemm]

So I have been doing a bunch of research and find people saying both yes and no, and haven't seen any official documentation stating either way.
I know typically short sale agreements say there are no proceeds to the seller, exception being any incentives offered, and those will go to satisfy outstanding liens first.

Here's the situation; FHA loan and BofA finally set a sale date. It is a little more than two months out now, and I have to move next month anyway. Of course along with the notices from the bank there are a flood of RE agents looking to help. Mortgage was discharged so right now getting it out of my name is the important part - however, several of the agents work with investors. I had asked them about the $1000 FHA short sale moving assistance, and the fact that I have HOA debt of more than that already (HOA's explanation was if I keep the property, the pre-BK HOA debt stays.. Liens were intact so makes sense, and I wasnt keeping the property anyway) So a few of the agents said they have investors that would, as part of their purchase, pay off the HOA - and contribute to the move. (One even said they might even if we vacate before the sale.. One of the bank terms did say currently living in or have lived in within 12 months)

Now, normally I wouldn't even care, let the bank do their thing and go on my merry way, but between the cost of the move and living expenses until paychecks start up again I am going to need everything I have saved up and then some, so getting anything extra out of this would be extremely helpful right about now. Helpful, but not worth committing mortgage fraud to get! Essentially I have to go 5 weeks before a paycheck, for three people.. My feeling on it is this; if the bank gets the amount they want in a short sale, and any claims for anything from the FHA are truthful, was anything wrong done? If buyer offers to give me fuel money for the 2500 mile drive, is that something that needs to be disclosed to the bank?

Half of me says this is not worth the headache.. And the other says go for it, and feels it might be the best way to make sure it's out of my name quickly..

[tobee43]

if the way i understand this is someone will give you an incentive and it transfers the deed legally, i'd jump on it. but, i would certainly make certain the transaction is "legal" and binding. i don't exactly understand how you can do a short sale without bank approval? what am i missing?

[gregemm]

It would still have to be approved by the lender like any other. Thinking it may need to be disclosed to them or something so if it did come up at some point it wasn't an issue

[tobee43]

well you know, i know someone that did a deed exchange....i'm not certain exactly how it worked but it got the deed turned over and it's filed. however, the mortgage is still outstanding. i checked it out on the county records. but it got done.

[Drazil65]

There is no guarantee that the short sale will be approved (as a matter of fact with BOA I would be surprised if it were) and could delay the foreclosure sale. The bank could pull the plug on the sale and settle into a very long delay while "trying to approve the SS" and then reject it in the end. You just never know with BOA especially, I would tread very lightly with them. Good Luck!

[despritfreya]

Since the TS is in a little more than 2 months the fastest way to move on is to let Recontrust conduct the sale. If you begin the SS process the TS may be postponed. If you are actually able to get the lender (including the 2nd if you have one) to agree, expect to close the deal within 90 to 180 days, maybe more since you are dealing with BOA. IMHO, the only one who benefits from a SS is the realtor who, if the deal goes through, gets a commission. And. . . if the realtor is promising you some cash, get the cash up front - unless it is an incentive from the lender, don’t trust the “investor” buyer.

As to the HOA, the pre petition dues were discharged in your bk. I hope you have been paying all of the post petition dues/fees/assessments.

As to the kick back. . . not sure how current the info on the Net is but. . .

Google “short sale affidavit” or . . .

Fannie Mae Affidavit found here:

https://www.fanniemae.com/content/guide_form/191.doc

Wells Fargo Bank sample found here

http://reo.wellsfargo.com/docs/Short%20Sale%20Affidavit%204.11.12.pdf

Additional info found here:

http://www.realtor.org/topics/short-sales/freddie-mac-amends-short-sale-affidavit-policy

Des.