Litton Loan - Buyer agrees not to sell within 90 days

[Michael G.]

This clause was in a memo sent to me from Litton.

1.) Arm’s Length Clause - “Seller and buyer each represent that the sale is an “arm’s length†transaction and the seller and buyer are unrelated to each other by family marriage or commercial enterprise. The buyer agrees not to sell the property within 90 days of closing of this sale.â€

Is that going to prevent me from doing a double close or is that meant for FHA buyers due to 90 day seasoning on FHA loans?

[Scott Hubbard]

Originally posted by Michael Greenidge:

This clause was in a memo sent to me from Litton.

1.) Arm’s Length Clause - “Seller and buyer each represent that the sale is an “arm’s length†transaction and the seller and buyer are unrelated to each other by family marriage or commercial enterprise. The buyer agrees not to sell the property within 90 days of closing of this sale.â€

Is that going to prevent me from doing a double close or is that meant for FHA buyers due to 90 day seasoning on FHA loans?

This anti-flip clause is likely a directive from the investor as I too have not seen this clause from Litton before.

In my opinion, it is certainly debatable whether the lender has the right to restrict the sale, but becuase you must disclose this information to your end-buyer, it is still very effective becuase he will not be able to get title insurance.

Will is right, ask them to exclude the verbiage. Better yet, do what my attorney used to charge me for, rewrite the entire letter verbatim excluding only the restrictive language, then sign and return it. Many times they will not even say anything.

Good Luck!