Short Sale

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V8590

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We have been trying to get a modification on our mortgage for 2 years now, finally they are telling us they don't think they can help us. My father and I are the only two on the loan. If we would decide to go for a short sale, could my husband buy the property in his name?? Since he is not on the load papers.

Thanks for any help you can give us.
 
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We have been trying to get a modification on our mortgage for 2 years now, finally they are telling us they don't think they can help us. My father and I are the only two on the loan. If we would decide to go for a short sale, could my husband buy the property in his name?? Since he is not on the load papers.

Thanks for any help you can give us.


Technically, anyone can buy at a short sale.
As long as there is no complicity, you should be okay, if he is successful in buying the property.
However, if the bank (or lender) discovers the familial tie, I suspect they could balk or raise a ruckus.
Or, they might bid against him.
But, as long as the bank and you are happy, all should be okay.

If another relative (or trusted individual) were in the mix, things might be easier for everyone.
 
The mortgage holder will certainly require the short sale to be at "arms length". This would definitely be stipulated in their short sale acceptance agreement.

Has this been a primary residence for you (homestead) for the past two years? If not, you and your father will be responsible for paying taxes on the forgiven amount of the mortgage.
 
Yes, this was the house i grew up in, we have lived in this home <my husband, myself and children> for the past 5 1/2 years. We moved in here to take care of my father. It's been in our family for over 50 years. Does "at arms length" not related to the borrowers?
 
Anyone related to the borrower would be excluded from purchasing the short sale. This is most likely a clause in the agreement with your mortgage company that allows you out of your mortgage contract due to the short sale. Of course nothing keeps you from having a friend buy it and then sell or deed it back to your husband.

Check for the clause and see how it reads. I'm sure it is in there. I recently short sold a $430,000 home for $155,000. Quite a steal for the new owner!!

The Mortgage Debt Relief Act of 2007 will protect you from having to pay taxes on the forgiveness of debt.

PS: Army is correct by saying that anyone may legally buy a short sale. Though, you may be breaking the terms of your agreement with the lender if you allow a relative to purchase the short sale.
 
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