Foreclosure in Portland>Question Details

Wandajane, Home Seller in Portland, OR

Can my grandmother buy my house at a short sale and give it back to me?

Asked by Wandajane, Portland, OR Sun Oct 3, 2010

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Hi WJ: you've gotten good answers but can I ask if your grandmother has the means to purchase the house and give it back to you, perhaps you should speak with a trusted mortgage broker about her helping you refinance the home or catching up the back payments and becoming current on the loan. That way you could keep you home with your grandmother's financial help
Janeese Jackson, Principal Broker
Real Estate Resource
jj@janeesejackson.com
503-709-0802
1 vote Thank Flag Link Sun Oct 3, 2010
I think a big part of the picture is going to be the current creditworthiness of our customer here and what the true intentions are. Lenders tend to be a bit cautious when it comes to foreclosure bailouts (not a very kind term but that's what this would be).

If the current owner has decent credit at this point, no reason the grandmother couldn't gift some funds to help facilitate a refinance. If the credit is not good, it's going to be a tough road.

What are the long term plans here? If it is to stay in the home it might be worth checking out a refinance. It may also be a good idea to see if a loan through HARP can be done.

My guess is that the credit is already pretty damaged and a refinance is out of the picture. Can we get some clarification along those lines?
0 votes Thank Flag Link Mon Oct 4, 2010
Wandajane:
Tha naswers you have received are mostly correct. In a short sale you have to sign what is known as a arms length transaction. Basically telling the bank tat you ahve no relationship with the seller and that you are not going to permit the seller to reside back in the house. The bank is already going to lose money on the home. They are not willing to do that just becasue the market has changed and the seller does nto want to absorb the loss of the home. In a lot of cases, the seller cannot afford the current payments. Has he tried to ask for a loan modifcation on the loan to see if he can get the payment reduced?
I also agree with the other thinking below on that see fi he can get it refinaced with his grandmother on the loan with him....both alternatives are more favorable credit wise for him. And they will allow him to stay in the house.
Web Reference: http://www.davedicecco.com
0 votes Thank Flag Link Mon Oct 4, 2010
You should approach it differently, call your bank tell them your grandmother wants to help but it would have to be a short refi where she becomes the title holder of the home.

Good Luck,
Bob Patrick
Buy a home after foreclosure
0 votes Thank Flag Link Mon Oct 4, 2010
That would be great if she could but all documentation has to be signed that this is an "arm length" transaction meaning she cant be related to you - nor allow you to live in the home after it is purchased. Wish it were that easy.
0 votes Thank Flag Link Sun Oct 3, 2010
The answers below are correct in not being able to sell short sale to your grandmother, but Janeese has a great answer that might be something that would work out for you. Sometimes thinking outside of the box can give you a few more options to try.

Good luck
0 votes Thank Flag Link Sun Oct 3, 2010
I concur with the others Wanda- the sale cannot be to a related party. Sorry!

Dave
0 votes Thank Flag Link Sun Oct 3, 2010
Hi Wanda. The answer is NO, she cannot. At some point during the short sale, your grandmother would have to sign a sworn affidavit that says she is not going to let the current owner live in nor rent the property. Nor can she 'gift' it back to you, according to their very specific rules.

If she did any of the above, it would be considered FRAUD, simply illegal and a crime.

GOOD LUCK.

Scott Miller, Realty Associates, Boca Raton, FL
0 votes Thank Flag Link Sun Oct 3, 2010
If it's your house that is the subject of the short sale the answer is no. It must be an "arms length transaction" meaning that you cannot have a relationship with the buyer.

I specialize in short sales so if you are interested in speaking with me regarding your home, please contact me at your earliest convenience for a consultation on your options.

Garett Chadney, SFR
Principal Broker
RE/MAX Equity Group
(503) 495-3123 direct
0 votes Thank Flag Link Sun Oct 3, 2010
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