| 2009-03-13 - Land Trusts Revisited For Short Sales |
It has been a few weeks since my last post regarding Land Trusts VS the Option Contract. I have discussed the Land Trusts with a few attorney friends of mine, some investors and some colleagues over the past few weeks and am still very unclear. From what I can surmise Land Trusts are not being used for short sales as widely as previously thought. We all know the land trust works for several types of investing including the newest introduction by Jeff Adams and buying REO's at auction. The question was never about whether land trusts actually work.
I have not questioned the validity of the land trust nor the use of them. What I have questioned is the willingness of the banks and the legalities of using them during a short sale specifically. I have yet to speak with anyone using them for short sales successfully, currently and frequently enough to show me that they will hold up against scrutiny with the amount of files we currently service. I would love and am very open to someone proving me wrong. What I know is that we have entirely too many files on a monthly basis to "test" how they work. We are successfully and frequently using the Option Contract for ours and they work wonderfully!
That still raises the issue of seasoning with FHA and some conventional lenders. The only way around this issue is to buy and actually hold the property for a period of time to satisfy the specific seasoning requirements of the buyer's lender. With the prices of funding for short term being so high I prefer to just avoid FHA financing altogether.
What I have also noticed is the willingness and acceptance of the Option Contract with several title companies. Flagship Title, Old School Title and now Fidelity National are all comfortable closing with the Option Contract provided the process is carried through properly. I was a little shocked when I heard that Fidelity trained nationwide on the Option but pleased none the less to know that it is catching on. There certainly are other title companies around that have closed with the option but our company works on a national level and prefer to keep things uniform. The afore mentioned title companies offer title services nationwide.
At any rate, I am still open to hear your success stories with land trusts and short sales specifically. Please feel free to email me at donna@americanlms.com or visit our main site and use the contact us form. I would prefer if you comment here on the blog so everyone can benefit from the clarity but if you feel the need to privately speak with us please use the methods mentioned above.
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