Tip 11-2013: Short sales & Limited Prohibitions on Resale

Fannie Mae and Freddie Mac have recently established guidelines for any short sale of one of their loans. These new guidelines prohibit a purchaser of a short sale property from the following:  

• No resale of the property for any price within 30 days from the short sale closing date
• No resale of the property for greater than 120% of the short sale price for 90 days from the short sale closing 

The Deed into the Purchaser must include the following provision:          

"Grantee herein is prohibited from conveying captioned property for any sales price for a period of 30 days from the date of the deed. After this 30 day period, Grantee is further prohibited from conveying the property for a sales price greater than $[insert value equal to 120% of short sale price] until 90 days from the date of this deed. These restrictions shall run with the land are not personal to the Grantee." 

The loan servicer will be requesting a copy of the Deed to ensure that this prohibition is being included in all required deeds.  

P.S. This Deed Restriction language, although not currently enforced by all short sale lenders, will probably be required by most title insurance providers for the purchase of a short sale property. 

  

Contact me at 434-951-0858 or Tucker@TGBLaw.com if you have questions.

William D. Tucker
Tucker Griffin Barnes
Charlottesville, VA
434-973-7474
www.TGBLaw.com