Countrywide throws dirt in the ball game by adding a no transfer of title 30 days after short sale

[James ferebee jr]

This really sucks that countrywide adds a clause that if title is transfered within 30 days of the short sale the title company must report this to C/W.

Jim

[Kathleen A. Scanlon, Esq.]

I think this is a product of the Countrywide Loss Mitigation Department and created without consulting their legal department. It appears, at first blush, to be unenforceable as a restraint on alienation. Further, you, as investor, have no privity of contract with your homeowner's Lender.

That is the tact I would take.

[James ferebee jr]

So what do you think?
I should go on and close anyway and just tell them that I am reselling?
Besides it's in my contract that I will lease, trade, sell, or list the property.
So I have told them upfront...

Jim

[James ferebee jr]

P.S. they tell me that they did contact their legal dept..

Here's a good one the files that Tracey from NW Foreclosure Advisors will not have that verbage in there..
I just received an approval from him a few min ago and the verbage is not in there.
He told me that the rep he is working with will not place that verbage in his approvals..
Dble standards to say the least...

Jim

[Kathleen A. Scanlon, Esq.]

Title will also have a hard time with that language - tell them title will not insure with that language because they cannot prevent you from transferring the property after the fact.

Further, tell them it is unenforceable as a restraint on alienation, that you have no privity of Contract with them and you are going to contact the attorney general to alert them as to this new tactic. You have three good arguments there - you have to measure how you strong you want to get with them. Use the title one first and escalate.

James ferebee jr said:

P.S. they tell me that they did contact their legal dept..

Here's a good one the files that Tracey from NW Foreclosure Advisors will not have that verbage in there..
I just received an approval from him a few min ago and the verbage is not in there.
He told me that the rep he is working with will not place that verbage in his approvals..
Dble standards to say the least...

Jim

[Kathleen A. Scanlon, Esq.]

James whatever happened with this?

Kathleen

Kathleen A. Scanlon, Esq. said:

Title will also have a hard time with that language - tell them title will not insure with that language because they cannot prevent you from transferring the property after the fact.

Further, tell them it is unenforceable as a restraint on alienation, that you have no privity of Contract with them and you are going to contact the attorney general to alert them as to this new tactic. You have three good arguments there - you have to measure how you strong you want to get with them. Use the title one first and escalate.

James ferebee jr said:

P.S. they tell me that they did contact their legal dept..

Here's a good one the files that Tracey from NW Foreclosure Advisors will not have that verbage in there..
I just received an approval from him a few min ago and the verbage is not in there.
He told me that the rep he is working with will not place that verbage in his approvals..
Dble standards to say the least...

Jim

[Kathleen A. Scanlon, Esq.]

As an update to seeing little restrictions popping up in short pay approval letters...We have a short sale/land trust deal going and got our approval from GMAC. I noted the following language in the short sale approval letter:

"This transaction may not involve a third party who receives a deed prior to this closing"

This, of course, was problematic. We contacted the negotiator and advised that, as a matter of course, we have distressed home owners place their properties in a land trust for asset protection and insulation from judgment creditors. I also noted that this type of transfer, where the homeowner retains the beneficial ownership of said trust, does not violate the due on sale clause of a mortgage under the Garn St. Germain Act.

Guess what? We got a fax saying that the investor/mortgagee approved the deed into the trust.