Heads up on wells fargo approvals

[Michelle Kasper]

I just wanted to give everyone a heads up if you are working with any wells fargo files. Apparently now they are issuing approval letters that Do Not stipulate that you must not resell the property for 30 days but once they approve the final HUD they are attaching an affidavit that everyone (seller, buyer, title agent) must sign stating that the property will not be resold within a 30 day period.

Hope this saves some of you a little bit of a headache.

Michelle

[Scott Hubbard]

Land Trusts:

Everyone talks about land trusts as being very effective. I have used them in short sales in the past and they create as many problems as they solve. Michael hit on one major issue and there are many others.

Lender Restrictions:

Dealing with lender restrictions is really best dealt with an attorney and title company. I like Justin's suggestion in pushing the title company to seek HUD 1 approval ahead of time. That way, you have time for your team members to deal with these illegal restrictions.

Also, it is very clear to me, since Michelle's partner was trying a simultaenous close, that WF, in an attempt to keep this type of transaction from happening, used the restriction at the last minute.

If you are using a simul close, then the HUD 1 will tip off the lender as to what you are doing.

Investors need to realize, if your trying to circumvent the process using simul. closings, land trusts, or other tricks designed to obscure or trick the lenders, ultimately it bites us all in the *** becuase we spend more time and money on attorneys and lost deals then we would have had otherwise saved using the end-buyers funds.

It costs under $5K to pay for transactional funding on most deals. If you cannot negotiate that cost from the lender, then I would recommend droppping the deal (because it is a dog anyway) or hire a negotiator because you suck.

Anyone trying to simul. close should not be surprised about the restrictions. CW got tired of giving up margin to investors double closing and they started the 30 day restriction. Since BOA purchased CW, they are now using this same restriction.

Read the writing on the wall.... This is going to get more and more restrictive until we can no longer profit.

Stop being lazy, inept, or just plain greedy... Instead spend your time being a more effective negotiator and less time and energy trying to get around the restrictions. Chances are, if you negotiate well, you can price in your holding costs and still profit.