Yesner Law
Free Initial Consultation
Local 813-774-3013
Toll Free 877-531-4931

Arms Length Transactions & Short Sales

Transcript: Bank fraud and flipping fraud now that, this comes, it can happen but mostly as a result of foreclosures. So, So, what do mean by bank fraud what do we mean by flipping fraud, we'll the first thing we need to talk about is the arm's length affidavit, that's typically what comes up the most. A lot of times the question I get asked often is "Well can we do a non arms length transaction?" Can I short sell this property to my brother to my parents, my whatever relative, to my friend, to my neighbor?  I'm going to give you a little bit of an unconventional answer, I think the answer is yes you can do a non arms length short sale, as long as you disclose it to the lender.

Here's a couple of quotes from an arms length affidavit, every bank is a little bit different, I believe this one is from Chase. The definition of an arm's length transaction, unrelated and unaffiliated by family, marriage or commercial enterprise, no agreements that have not been disclosed, and in this particular one, the buyer cannot resell the property within 30 days. Now the thing that makes this fraud, the thing that makes this improper if this is a non arms length transaction and the parties sign the affidavit, is the inducement, the signing of the affidavit is consideration for the bank to accept the short sale proceeds.

That's the danger of doing an non arms length transaction without disclosing it to the bank, and it does carry a criminal penalty. It carries a criminal penalty of up to 5 years. So it is possible, and I've done non arms length short sales before. I've disclosed them to the bank, and when I've disclosed the particular facts and circumstances the banks in some cases have been okay with it, in some cases have not. and we have to another route. When clients typically ask "How do I describe an arms length transaction?" There you go.

How Can We Help?

free initial consultations Complete our online contact form or call 813-774-3013

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Contact Information

Yesner Law
13135 W. Linebaugh Ave., Suite 102
Tampa, FL 33626

Toll Free: 877-531-4931
Phone: 813-774-3013
Fax: 813-344-0950
Map & Directions