My wife and I are looking to purchase our first home and have been looking for one for over a year now. We finally found what seems to be a great deal, as the year of looking for one have somewhat made it easy for us to spot one. But, and there is always a but, there is a small issue that we have not yet encountered before and I have been trying to educate myself in.
The seller has hired a "middle man", who i will call an investor, who has negotiated a short sale price with the sellers mortgage company. The investor then marketed the house as a short sale (we did not find out all of this till much later). After we looked at the home and decided to put an offer in. After some negotiations we found out that the investor was planning to do a double closing on the property and was given a strict deadline to close by (we had three weeks at that time to close). We consulted our lender(s) who did not want to touch this due to the new regulations in place and they would have a hard time selling this mortgage to Fannie Mae/Freddie Mac and also noted that that closing time lien was not reasonable to begin with. We then informed the investor (who claimed to be doing this transaction for the seller as a favor due to their friendship) that we are willing to purchase the home, but they would have to move out of the way as the bank would not do it otherwise.
He then proposed to do a separate contract with us for a "Finders Fee" and has disclosed to us what price he negotiated with the mortgage holder for the short sale and told us what amount he wants as a Finders Fee which he does not want to disclose in HUD. We did not feel comfortable with that from the legal standpoint.
He now proposes to do an "Assignment of Contract" with us with a fee POC. He states that he is not selling us real estate but his "equitable interest" which is the purchase contract. And again, he wants to do it outside of HUD, which is the part we are concerned with.
Now to the question, if the property is a short sale and the investor have negotiated a short sale price with the mortgage holder on the sellers behalf. Dose the Assignment of Contract fee (POC) have to be noted in the HUD documents for mortgage holder and buyers lender to see or can it be a side contract between the investor and the buyer (and therefore not disclosed)?
Thank you all!