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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Re: Double Closings Posted by al on November 18, 2008 at 1:35 PM In Reply to: Re: Double Closings posted by Jerry - Ca. on April 06, 2008 at 11:26 AM my question is what the purpose of a second title and whats beening done with the 1st title and the 2nd title. and what is it that needs to be done with the 2nd hud1? thanks : : Jerry, : : Your solution sounds pretty good. Have you or other people tried it out before? Also, I am still confused about several things. Would you mind shedding some light on the following questions? : : 1. Why is it that double closing is considered bank fraud that escrow and title companies shun it? : : 2. I do not understand “Buyer on HUD1 for loan pay-off and Seller on HUD1 to End-Buyer.” Please explain. : : 3. Aren’t there two HUD1’s involved here – one between you and the Seller/Settlor, and the other between you and the End-Buyer? The HML’s funds are used for the 1st transaction, and the End-Buyer’s funds for the 2nd transaction? : : 4. The closing of the 1st transaction precedes the closing of the 2nd transaction by only a day or less. How is the seasoning issue taken care of? How does the Trust help here? : : Thank you in advance for your help. : : SC : XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX : SC: : With regard to your questions ... I'll respond by #: : 1. First .. remember we are only talking about "Short Sales" here and NOT any other type of typical RE transactions. The lender that is taking the "short-fall" or loss will not make the deal if anyone in the transaction is making money. This type, and all other transactions, require full disclosure via a Hud-1. To falsify who is buying the property is fraud. You have an Investor middleman using the End-Buyers funds to buy the propertry and to make a profit. This "fraud" part has been told to me by very experienced investors, although I don't have a legal precedence to give you, but it makes sense as to why Escrow Companies and Title Companies want no-part of doing these type of transactions! : 2. Refer to #3 below. : 3. Yes there are two HUD-1's. The first between the Trust as Buyer with the Settlor(original indidual seller) as one of the Co-Beneficiaries with full disclosure to the short-fall lender. This is really more of a re-finance type deal or the Satifaction of an outstanding loan being paid-off. No profit is being taken and the Trust (and Beneficiaries) were already the recorded owners. When a Trust is set-up ... a Trustee is appointed a deed is recorded transferring equitable title to the Trustee/Trust. This is completed before the Transaction closing ... in fact the "Short Sale" can even be negotiated with the Trust as Buyer! The second and simultaneous closing minutes later, occurs with Trust as Seller to the End-Buyer! Again full disclosure on a HUD-1! : Part 2 ... Yes the HML funds are used and acceptable by the shortfall lender because the HML is a Co-Beneficiary of the Trust. The End-Buyers conventionally borrowed funds are used to buy the property from the Trust. : : 4. There is NO Seasoning Issue because, the transfer of legal and equitable title to the trust is not considered a sale. The existing owner (the Trust) is selling to an End-Buyer ... only one recognized sale and therfore NO seasoning issues! : Jerry-CA. : NARSonian : Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : my question is what the purpose of a second title and whats beening done with the 1st title and the 2nd title. and what is it that needs to be done with the 2nd hud1? : thanks : : : : Jerry, : : : Your solution sounds pretty good. Have you or other people tried it out before? Also, I am still confused about several things. Would you mind shedding some light on the following questions? : : : 1. Why is it that double closing is considered bank fraud that escrow and title companies shun it? : : : 2. I do not understand “Buyer on HUD1 for loan pay-off and Seller on HUD1 to End-Buyer.” Please explain. : : : 3. Aren’t there two HUD1’s involved here – one between you and the Seller/Settlor, and the other between you and the End-Buyer? The HML’s funds are used for the 1st transaction, and the End-Buyer’s funds for the 2nd transaction? : : : 4. The closing of the 1st transaction precedes the closing of the 2nd transaction by only a day or less. How is the seasoning issue taken care of? How does the Trust help here? : : : Thank you in advance for your help. : : : SC : : XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX : : SC: : : With regard to your questions ... I'll respond by #: : : 1. First .. remember we are only talking about "Short Sales" here and NOT any other type of typical RE transactions. The lender that is taking the "short-fall" or loss will not make the deal if anyone in the transaction is making money. This type, and all other transactions, require full disclosure via a Hud-1. To falsify who is buying the property is fraud. You have an Investor middleman using the End-Buyers funds to buy the propertry and to make a profit. This "fraud" part has been told to me by very experienced investors, although I don't have a legal precedence to give you, but it makes sense as to why Escrow Companies and Title Companies want no-part of doing these type of transactions! : : 2. Refer to #3 below. : : 3. Yes there are two HUD-1's. The first between the Trust as Buyer with the Settlor(original indidual seller) as one of the Co-Beneficiaries with full disclosure to the short-fall lender. This is really more of a re-finance type deal or the Satifaction of an outstanding loan being paid-off. No profit is being taken and the Trust (and Beneficiaries) were already the recorded owners. When a Trust is set-up ... a Trustee is appointed a deed is recorded transferring equitable title to the Trustee/Trust. This is completed before the Transaction closing ... in fact the "Short Sale" can even be negotiated with the Trust as Buyer! The second and simultaneous closing minutes later, occurs with Trust as Seller to the End-Buyer! Again full disclosure on a HUD-1! : : Part 2 ... Yes the HML funds are used and acceptable by the shortfall lender because the HML is a Co-Beneficiary of the Trust. The End-Buyers conventionally borrowed funds are used to buy the property from the Trust. : : : : 4. There is NO Seasoning Issue because, the transfer of legal and equitable title to the trust is not considered a sale. The existing owner (the Trust) is selling to an End-Buyer ... only one recognized sale and therfore NO seasoning issues! : : Jerry-CA. : : NARSonian : : [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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