Short Sale Buy Back. Can it work???

New HAFA regulation allows some people to STAY IN THEIR HOMES AFTER A SHORT SALE

Section 7.3 of Chapter IV of the HAFA Handbook requires that a short sale be an arm’s length transaction. This Supplemental Directive amends this restriction to allow servicers the discretion to approve sales to non-profit organizations with the stated purpose that the property will be rented or resold to the borrower, so long as all other HAFA program requirements are met. Servicers offering programs of this type must include program descriptions and conditions in their HAFA Policy. Servicers must retain in the servicing system and/or mortgage file the evidence provided during the HAFA evaluation demonstrating that the organization was a nonprofit organization.

Here is the problem: In Nevada, the non-profit is trying to buy short sale properties at 65-70% of the appraised value, then sell back to the owner at the appraised value. After the purchase by the non-profit, the property is leased to the previous owners for up to 3 years, while they secure financing. I don't think many banks will discount a property 30-35% of it's true value. In California, the non-profit is only requiring a 20% spread, which is more doable.

If the program wont work for you: The waiting period after a short sale is 3-years for an FHA loan with 3.5% down, and 2 years with a conventional loan with 20% down. I have another portfolio program available in Nevada where a person can buy again after their short sale, foreclosure, or BK, after 1-year with 20% down. See> http://dantheloanman.com/buyagainafterbk.php

I am talking to a Nevada based non-profit about starting this program and accepting a 15-20% spread, which would be much more realistic than a 30-35% spread. If they decide to go ahead with the program, I'll send out an email blast and announce it here.

April 7, 2011
Original US Treasury Department directive to HAFA allowing a non-profit to purchase a home in a short sale. The Non-Profit can leaseback and resell the home to the (now) former home owner....

July 15, 2011
California Governor Jerry Brown signs SB 458 into law prohibiting deficiency judgements for all mortgages in a short sale...

JJuly 15, 2011
The Federal Trade Commission issued a statement announcing that it will forbear from enforcing most provisions of its Mortgage Assistance Relief Services (MARS) Rule...

July 14, 2011
Bank of America allows substitution of buyer on an approved short sale...

June 1, 2011
HAFA institutes guidelines change to make SSB legal and compliant (see pages 1 and 8)...

See shortsalebuyback.com for details on how this could work for you.

**I am not endorsing or recommending this program in any way. It's new so I dont have enough information to guide you, other than to provide the information above. Please do your own research and decide for yourself.