foreclosurehomeRecently I got a short sale approved on a 4 bedroom, 1 bath for $43,800.00 and my partners and I were going to flip the property to another Investor. However, after reading the required verbiage that the loan servicer required to be written into the Deed, it made it impossible to sell the property on the same day that we purchased it.

The servicer was Bank of America and the Seller was going through the HAFA program. Bank of America always places a 30 day hold on the property. In addition, item #8 on their Approval Letter it states “Another buyer cannot be substituted without prior written approval of Bank of America. The buyer may not alter how he will take title. For example, a buyer may not enter into a contract to purchase a property and then amend the contract to purchase the property as Trustee for a trust or any other legal entity.” Based on that verbiage, you cannot close in the name on the approval letter and then immediately place it into a Land Trust, even though I hear people state that the Land Trust is for Asset Planning.

I totally disagree with the fact that a Land Trust is used for Asset Planning, as it only covers who the beneficiaries are, and the Trustee is responsible for signing all the documents. In addition, this means you must not sell the property to anyone until 31 days have expired. There are ways around the 31 day hold; however, I only teach that Super Secret at my Foreclosures Gone Wild Boot Camp. Check my website for the next event.

On the HAFA Short Sale Affidavit, which all parties sign including the Realtor, it states “(b) There are no agreements, understandings, contractors or offers relating to the current sale or subsequent sale of the Property that have not been disclosed.” What this means is that you cannot have a signed contract with another Buyer to purchase the property from you until after the sale of the property.

I have closed 100’s of short sales and on this short sale, they included the following verbiage on the approval letter which must be placed on the Deed granting the Mortgage Company a deed restriction: “There are no transfers of this property within 30 calendar days of the closing of this transaction. For the period between 31 and 90 calendar days after the closings, the purchaser is prohibited from selling the property for a gross sales price greater than 120% of the HAFA short sale price. If the closing agent is aware of any agreement whereby the buyer is to transfer title or possession of the property to any, entity, including borrower or a third party, the closing agent must obtain the prior written approval of Bank of America.” Normally we would fight over this wording and change it a little so we could sell it right away. However, this is a new letter that I have never seen before which also gives the Seller their $3,000 relocation fee by mail within 5 days after closing.

Two things above upset me. One is the fact that they are controlling the investor to not resell the property for more than 120% of the HAFA Short Sale price during the 31 to 90 days. It is NOT ok for the Bank to take advantage of our Sellers, now they are trying to control our Buyers, too! There is a way I work around this again, which allows the property to be sold at a higher price, versus the Bank telling my partner and I how much money we can make.

The second thing that upsets me is that the Seller doesn’t get their relocation money until 5 days after the date of closing. Many Sellers cannot move without this $3,000 in their pocket.

So…..where is the Gray Line I am talking about?

Closing the property in the name based on the short sale approval letter and then doing a Deed and placing the property into a Trust. Yes, I could argue it is for asset planning, however, when the Bank looks back on the deal, which they do, if they see any red flags with a transfer to anyone, including a Trust, this Short Sale is null and void. The Seller can sue the Buyer, you, for not following the guidelines of the Short Sale Affidavit and the Seller will now owe the deficiency. In addition, if you did transfer the Deed anytime during the 1 to 90 calendar days, you are in violation of the terms of the Short Sale Agreement and you could be sued by the Seller, Realtor, Title Company and the new Buyer. IS IT WORTH IT? Heck no. You should have bought that property for a low enough amount that would enable you to hold it for at least 91 days.

After you purchase the property, you can start marketing for a new buyer. If you decide to sell the property to an FHA Buyer and some Conventional Buyers, then you can’t sign a contract for 31 days, due to seasoning issues, and the 31 days starts from the time that the end Buyer signed the contract. You might have heard that you can sell your property within 90 days to an FHA Buyer, however, because of this deed restriction, you can’t sell it to them until it is 91 days.

So what did my partners and I do? I spoke with an Investor/Attorney that owns his own title company and he said that, yes, there can be a transfer into a Trust. I further asked his assistant if we could do both the A(Seller) to B(Us) transaction with them, then do the B(Us) to C(End Buyer) through them and she put me on hold. She then came back on the phone and said “Yes.” Because I am the mentor and I joint venture with partners, I will continue to state that there is a “Gray Line” and I prefer to wait it out. My partners agreed with me so we are closing on Tuesday. We are looking to resell the property for more than the 120% of the HAFA Program, so we will wait for 91 days, unless a cash buyer comes forward and all the paperwork is done correctly.

Don’t be desperate on your deals! If it looks like a duck, quacks like a duck, then it is a duck. We will sell the house after the time period has elapsed and I believe it will be sold for much more. Remember, if you are buying your houses at the right price, then some extra holding time won’t kill your profit.

Happy Negotiating!

Kimberlee Frank

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Kimberlee Frank Broker Short Sale Expert


Kimberlee Frank Real Estate Broker and Teacher/MentorKimberlee Frank is known as “The Real Estate Junkie,” for her unique ability to find ways to creatively help buyers and sellers no matter which direction the real estate market is heading. Kimberlee had already worked as a legal administrator for an Attorney, Builder and Broker for 18 years when she began her Real Estate career in 1998. She dotted the i’s and crossed the t’s on hundreds of real estate transactions and thousands of documents, making her an expert in real estate documentation. Kimberlee’s success began in Fenton, Michigan. She specialized in selling, purchasing, renovating, retailing and lease optioning single-family homes. She has helped many sellers get rid of their “headaches” and helped many buyers find their dream homes!


Since 2003, she has specialized in foreclosures and short sales. After realizing how many families were being forced out of their homes due to financial difficulties, Kimberlee had a heartfelt obligation to use her experience to help those families. She has mitigated and closed over 500 short sales with the mortgage companies, saving Sellers from going into foreclosure. In 2006, Kimberlee and her family moved to Florida. She lives in Oviedo and her Sell Fast Realty Office is in Winter Springs, serving residential and commercial sellers and buyers in multiple counties in Central and Southern Florida.

Kimberlee is also a Trainer and Mentor and has created several different “How To” systems on real estate. Her unique strategies continue to educate real estate professionals across the country. If you have a proven system to help others out of hardship, why wouldn’t you duplicate it and share it with as many people as you can? Kimberlee continues to work with this philosophy!

Kimberlee Frank Author of Big Ideas for Your Business
Kimberlee Frank has been featured on ABC, NBC, FOX, CBS as well as Wall Street Journal, Newsweek, USA Today and numerous other publications. She is the bestselling author of “Big Ideas for Your Business” (Advantage Media 2009). She was also selected as the #1 Short Sale Expert by America’s Premiers Experts.

Please contact Kimberlee at her office at 407-888-3433 to schedule a Free Facts About Foreclosure Seminar. She has numerous testimonials from sellers, buyers and other real estate professionals who are familiar with her giving heart. Whether it is 1 person in need or 1,000…..Kimberlee will educate them on real estate and give them a solution with a peace of mind!

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Are you unsure what to do with your house? Do you need to educate yourself about your options. Click the following link Free Facts About Foreclosure for more information.


God Bless,

Kimberlee Frank


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