Wholesale a REO property

[Alex Khodnev]

Hey everyone!
My question is for those who works at title compaties or have strong understanding of title transfer process.

Here is the story:

I have a property under contract. That came from wholesaler and it's REO owned right now. Which say, he have a property under contract under his name and he assigned it to me.

Now, for my understanding, banks are pretty strict with a contracts. Once it signed, thats almost impossible to get something changed. My question to this guy was, how can he actually assign this property to me, without closing on that first? Here is his answer:

"As I mentioned in our previous conversation, since this is a bank owned REO property, the seller is very strict in changing the original terms of the original contract (like changing the name of the buyer). So as a response to that, our assignment is a little different than the traditional assignment with a normal seller.

Instead, to comply with the sellers regulations and also protect our end buyer, we have 2 different ways to do the assignment.

1. First we try to make a request to the seller to add the investor as a 'co-buyer' on our original contract with the seller. The investor will have 99% interest and we have 1%. Before closing, we draft a quitclaim deed removing our interest. This will be sent to escrow and recorded with the original deed and our 1% will be removed at the same time the other docs are recorded.

2. If the seller does not allow us to add a co-buyer to our contract, we will draft a grant deed (like the one attached) that will be will be notarized and sent to escrow to be recorded at the same time as all of the other documents. This will remove any of our interest in the property and the title will be immediately transferred to the end buyer. The original notarized deed will be sent to escrow before the buyer sends their closing funds and escrow will record both deeds one right after the other. "

So, I never heared about that type of closing.
What do you think about? Will appreciate any your input.

Thanks much!!