Posted by John on January 22, 2006 at 06:51:53:
Adam,
Are you buying the note or doing a short sale?
You are not required to hold property any amount of time.
On the borrowers credit report it will say transfered to another lender if you buy the note and paid less than owed if a short sale.
Sounds to me like you need to read up on short sales, Ckeck Archives
Short Sale - Posted by Adam
Posted by Adam on January 21, 2006 at 19:16:58:
I am attempting to buy an acquaintance house in a short sale. I am not planning on moving into the property but rather rent the property or sell it. Is there a time period I am required to hold onto the property? Once the sale goes through and the note is bought from the bank at a discount (approx 70K below face value) how will this reflect on the current owners credit report? I am concerned that it will not show it as fully satisfied. Any help or education on the short sale process would be much appreciated.
Thanks,
Adam
Re: Short Sale - Posted by William Bronchick
Posted by William Bronchick on January 24, 2006 at 07:44:16:
The lender has to options with regard to the amount of debt that is discounted. First option is for the lender to go after the borrower for the difference, which is limited in some states (e.g., CA) if the property is the borrower’s principal residence. The second and more common option is for the lender to write it off, in which case the debt is legally “forgiven”. Your short sale agreement with the lender should spell this out. The only challenge with the latter option is that debt forgiven is considered income received to the borrower, so it may affect his taxes. If the borrower was insolvent at the time (as in the case of him filing Chapter 7 bankruptcy), then there’s no problem for the borrower.