Daughter & son-in-law want to buy our house for the appraised price. FHA loan, approved for over the amount Banks will not lend because family

Asked by Paisleydale, Paisley, OR Wed May 18, 2011

- why Don't understand why GMAC and Bank of America will not fund our Daughter to buy our house, just because we are related. The price is a Fair Market Price. We could not sell it for more money to anyone else.

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6
John Remboldt, , Oregon
Sun May 22, 2011
Not only can they buy it, you can give them a "gift of equity" for the down payment and closing costs. The only exclusion is if you are behind on the payments. That would be a "bail out" and not approved.

John Remboldt
HomeStreet Bank
(503) 317-8886
john.remboldt@homestreet.com
http://www.homestreet.com/jremboldt
0 votes
Lana Lavenba…, Agent, Grants Pass, OR
Thu May 19, 2011
There are many good answers and that is true. Banks are not allowing family's to "bail" out their families - they feel too many problems have happened with that. I dont understand it either though. What difference does it make who buyes it as long as they are paying fair market value and the buyer whoever they are can qualify. I will never understand out government anyway.
0 votes
Abrir Gonzal…, Other Pro, Los Angeles, CA
Thu May 19, 2011
The bank may feel there is some type of bailout. You have to understand that with all of the shady transactions in the last few years, lenders are not taking any chances. There may be a lender out there that will fund the loan but you would need a mortgage broker who can shop your scenario around. Find a mortgage broker who works with a variety of lenders. I am sure someone will lend, especially if the situation doesn't pose to big of a risk. Best of Luck!
0 votes
Jeff Nunley,…, , Eugene, OR
Thu May 19, 2011
We do these all the time as long as there is no current default or short sale involved. FHA's position is that they do not do loans to help family members bailout family. In a short sale or pending foreclosure the transaction must be "arms length".

I do have a couple of ideas that might help though, feels free to contact me if you like.
0 votes
Scott Godzyk, Agent, Manchester, NH
Thu May 19, 2011
If it is a regualr sale should not be a problem, if it is a short sale, it is considered an arms length transaction and that is not allowed.
Web Reference:  http://www.ScottSellsNH.com
0 votes
Suzanne MacD…, Agent, Succasunna, NJ
Thu May 19, 2011
Are you selling your home in a short sale? If so, unfortunately the banks are not going to approve the sale to anyone who is considered to be a family member. They insist that the purchase be an 'arms length' transaction and they will require both the seller and the buyer to sign a legal document to that effect. It's unfortunate, banks seem to be determined to punish homeowners that are struggling, but no one wants to hold them responsible for creating this mess in the first place.

I wish I could give you better news, but I can't. My heart goes out to you and your family.
0 votes
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