Arm's-Length Means You Can't Sell a Short Sale to Your Mom

Most short sale banks insist that all parties sign an arm's-length affidavit prior to issuing short sale approval.

In fact, banks such as Wells Fargo routinely send me a series of addendums that they want signed before sending the file in for review. Some of the documentation is an attempt to stop mortgage fraud.

I recently received a arm's-length affidavit for a short sale and sent it to the buyer's agent for forwarding. The agent's buyers were on vacation and unreachable. I suggested he send it via FedX but the agent decided to wait until the buyers returned from their holiday. As a result of the delay, Wells Fargo canceled the file . . . read more about Arm's-Length Affidavits on short sales.

More Articles by Elizabeth Weintraub:

• 6 Things to Know About Short Sales
  
• Who Can Profit From a Short Sale
  
• How to Buy a Short Sale

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_{At the time of writing, Elizabeth Weintraub, DRE # 00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.}