Home Selling in 07463>Question Details

12345, Home Seller in 07463

part 2 Of can i short sale my house to my girlfriend and move back in...... She will be paying cash at market value

Asked by 12345, 07463 Thu Mar 10, 2011

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I am not trying to be antagonistic at all, but even though your girlfriend is not "related" to you, I am still not sure the bank would look at the transaction as NOT being at arms length if you are in a relationship with the person buying the house and will moving back in after the short sale. Kinda touchy territory, so I would definitely speak to an RE attorney familiar with short sales and get their perspective of what the law and/or the banks may think.

I still think you should also speak to the bank about restructurig the loan if you have proof that the house is only worth $15,000 and you owe $98,000. Plus if the $15,000 is correct, I am not even sure the bank will eat a loss of $83,000 in a short sale. You would have to prove "hardship" to the bank and as far as I can see, if you are not behind in payments, haven't lost your job, or suffered any other financial hardship, the only hardship is that you don't want to keep the house.
Also just a thought, but since you won't be able to put your name on the title or the deed, what will happen if you and your girlfriend break up? She owns a house... and you? In addition to my previous comment about you credit rating getting screwed up for at least 5 year...all something to think about.

I understand your point about the finances, however, if the sole reason you are looking to sell the house is "strategic default", meaning you are not behind in payments, but don't want to "wait" 10 years till the value of the house comes up, that's a totally different story altogether. While not "illegal" , and IF the bank approved the short sale, it is IMHO, a bit unethical, and adding more fuel to the fire that has caused part of the housing collapse to begin with.
2 votes Thank Flag Link Fri Mar 11, 2011
12345 - From what I have read, you haven't mentioned whether you have any kind of financial hardship, other than you are unhappy, and you think it's "stupid" to keep paying on a home that has lost much of its value.

Everyone is unhappy paying on a home that has lost value, and you've got plenty of company these days, unfortunaely, with people who are upside down on their mortgages.

The questions are - Can you afford to keep paying? Have you lost a job? Have you suffered any other personal set back that would prevent you from making your monthly payments?
If the answers to the above questions are... No, no and no.........then a short sale probably isn't even an option.
Short sales aren't used or approved because people are "unhappy".

Speak with a real estate attorney who handles short sales, and explore whether this is even an option, regardless of whether your girlfriend can buy the home or not.

Also- what makes you think the home is only worth $15,000? Have you had it appraised...or, .have you had a Realtor in? Make sure to verify your numbers.

Best wishes..........
1 vote Thank Flag Link Fri Mar 11, 2011
If you can pull this off, and it's not considered fraud - just think - she will be your "landlord" !

You better hope she doesn't break up with you, as she will then own your home, and you will be homeless!
1 vote Thank Flag Link Thu Mar 10, 2011
I will let everyone know how it works. Thanks for all the help
0 votes Thank Flag Link Fri Mar 11, 2011

As Debbie said, now that you have shared the entire picture, and it seems you have no options at this point, and I too am sorry about your financial woes.

Speak to a GOOD RE attorney immediately, who is familiar with short sales, and knows how the process works. That is really the only way you are going to know for sure LEGALLY if she can buy the home and the transaction is considered at arms length.

Best of luck with the process, and do let us know how things work out for you.
0 votes Thank Flag Link Fri Mar 11, 2011
12345, as this thread evolved, you shared more information which now paints a different picture from where we first started!
I am sorry you are in financial distress, and have suffered the loss of your job.

By all means try for the short sale. It seems as though you have already started the process.

You really do need to get legal advice regarding your girlfriend buying the home.
Like you said, if it's not this home, she can buy another one, but I understand why you'd like to remain where you are.
If you find that you can sell the house to her, make sure you sign an offer at market value, and not an artificially low figure, or the bank will just reject it down the road.

All the best.......
0 votes Thank Flag Link Fri Mar 11, 2011
To the people that are helping me. Thank you!!!!!! To answer some of the questions..... my credit is already destroyed. The redemption period has already begun and in MI u have 6 months to pay or leave. I just want the best for me and my girl friend. I've already lost my cars. When u go from $54,000 a year to ZERO its hard to pay anything so the more help the better. THANK YOU AGAIN..................
0 votes Thank Flag Link Fri Mar 11, 2011
Yes to everything. Lost my job of 8 years. I don't make enough to even have a modification to my loan. It was appraised and i have mortgage insurance. Ive already talked to my bank about a short sale. There waiting on me to put it on the market. So i either have my girlfriend buy this house back or another one. Its her money not mine. There is no point in making my account current if i can not continue to keep it current. To everyone who thinks im trying to cheat the law. WAKE UP. Ive paid on the house for 9 years and its all to waste now. Thousands and thousands of dollars wasted. How do u think i feel. Im just looking for some good advice on weather not she can buy this house back because i know this house and put a lot in to it.
0 votes Thank Flag Link Fri Mar 11, 2011
GREAT QUESTION: you are not related to your girlfriend it depends on documents signed

However no lender can tell a property owner who can be a resident if she purchases the home for cash

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Fri Mar 11, 2011
im not trying to defraud the bank. That's why im asking if its legal or not. If i wanted to break the law i would ask how do i break the law and get away with it. Its in MI.
0 votes Thank Flag Link Fri Mar 11, 2011
Better to man up and walk away from the house then defraud the bank and society. And where in northern NJ is a house worth $15,000? That's less than the land value in the lowest priced urban neighborhood in existence.
0 votes Thank Flag Link Fri Mar 11, 2011
it wold even cost more than $98,000 after the 30 year it would be around $140,000+
0 votes Thank Flag Link Fri Mar 11, 2011
well i would try and keep the house but i owe $98,000 and its worth $15,000 according to the market. I dont want to pay on something that will take 10+ years just to break even when i can just buy it for $15,000. Thats just seem stupid to me.
0 votes Thank Flag Link Fri Mar 11, 2011
I agree with other posters. Banks want "arm's length" transactons, and this definitely is not.

Fraud is fraud and I am sure any real estate attorney worth his/her salt, once finding out it's your girlfriend, will not agree to represent you and be a party to the fraud. Believe me, you WILL need an attorney to help handle a short sale if it comes to that!!

However depending on how upside down you are in your mortgage, have you tried discussing with the bank to modify the loan and/or payments to make them workable?

Or if your girlfriend can afford to pay cash for the house, how about having her help you get the mortgage current, and you can keep your house?

Maybe you don't realize that a short sale affects your credit, tho not as long as for an actual foreclosure, but it does hurt you substantially.. Before you decide to try to defraud the bank, why don't you try to see if you can work something out that will allow you to keep the house, AND keep your credit in relatively good standing.

Mary Petti
Prudential NJ Properties
SFR Certified (short sale and foreclosure resource)
0 votes Thank Flag Link Fri Mar 11, 2011
Sounds like fraud to me, I guess you'll find out at some point. Hustling the system to get out of your obligation seems immoral, doesn't it?
0 votes Thank Flag Link Thu Mar 10, 2011
Banks most always want an arms length transaction. This means that it can not be sold to a friend or family member. They in fact make you sign a document at closing that this is in deed the case. You would need to discuss this with a Real Estate attorney before trying to go forward to see if they could do anything for you.
0 votes Thank Flag Link Thu Mar 10, 2011
When I have done a short sale, one of the documents involved asks if this is an "arms length transaction".
0 votes Thank Flag Link Thu Mar 10, 2011
All Short Sales are controlled by the Lending inst. that you are indebted to. No matter the offer, no matter if you approve and have an accepted contract with a buyer. The bank holds all the cards, because it is their investment hanging out there. They can agree to a short or they can just Foreclose. Which ever works better for them.

You will need a Realtor to try to make one happen. The Bank will generally not work directly with a Home owner or a Buyer...

Good luck to you!

0 votes Thank Flag Link Thu Mar 10, 2011
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