You need to get a context, and that involves understanding state and federal regulations concerning securities.

Each state is different in how they regulate various business practices.

I'm not well versed in California law, but I do think they have tighter regulations than some other states.Is it possible for Short Sale Investors that only specialize in "Option Contracts" with full disclosures and same day A to B - B to C closing transactions, to pursue Short Sale Property Leads that are already listed on the MLS with Listing Agents in California?

Or is it related to how they are regulated?

Now, some states may have a "SAFE Act" along with the fed, that you'll need to find on your own, but HUD does not regulate note sales.I suggest you check out commerce statutes in your state.

It's helpful to read the language to understand what does - and what doesn't work to legally avoid due-on-sale clauses.Exemption of specified transfers or dispositions: With respect to areal property loan secured by a lien on residential real property containing less than five dwelling units, including a lien on the stock allocated to a dwelling unit in a cooperative housing corporation,or on a residential manufactured home, a lender may not exercise its option pursuant to a due-on-sale clause upon— (1) the creation of a lien or other encumbrance subordinate to the lender’s security instrument which does not relate to a transfer of rights of occupancy in the property;(2) the creation of a purchase money security interest for household appliances;(3) a transfer by devise, descent, or operation of law on the death of a joint tenant or tenant by the entirety;(4) the granting of a leasehold interest of three years or less not containing an option to purchase;(5) a transfer to a relative resulting from the death of a borrower;(6) a transfer where the spouse or children of the borrower become an owner of the property;(7) a transfer resulting from a decree of a dissolution of marriage, legal separation agreement, or from an incidental property settlement agreement, by which the spouse of the borrower becomes an owner of the property;(8) a transfer into an inter-vivos-trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property; or(9) any other transferor disposition described in regulations prescribed by the Federal Home Loan Bank Board.

What you could do with the properties depends on local markets and regulations.

Him leaving sooner does NOT entitle him to refund.San Diego could also have local regulations on this.

Most people when skimming over regulations skip the first few pages looking for the meat, that's a mistake, as in the very beginning it will state the applicability and purpose. exemptions can aslo appear through out the text and unless described, other transaction not described will not apply.

Allowing purchase credits in connection with Section 8 entitlements is a violation of HUD regulations and will generally result in the landlord/property being taken off the approved list and the tenant losing entitlements.