Photo of Bank of America ATM Machine by Brian Katt, Framingham Rest Stop, Massachusetts. (Photo credit: Wikipedia)
Since Short Sales are transactions require lender approval, they want to make certain that there is no family or business association with between the existing home owners and buyer! In fact, if such a relationship is not disclosed to the bank, it’s considered Short Sale fraud and the bank could pursuit both buyer and seller in such transactions in court to recover their damages.
To prevent fraud in Short Sale transactions all banks including Bank of America require legal language signed by buyers and sellers testifying that the purchase of the sale of the Property is an “arm’s length” transaction, between Seller(s) and Buyer(s) who are unrelated and unaffiliated by family, marriage, or commercial enterprise.
In additions Bank of America requires both buyer and seller to certify that neither the Sellers(s) nor the Buyer(s) will receive any funds or commissions from the sale of the Property except to the extent the Seller(s) receive a relocation assistance payment approved by the Servicer and reflected on the HUD-1 Settlement Statement.
The intent of these declarations is to discourage fruad in Short Sales where some home owners might be encouraged to Short Sale their home by upfront money that’s not disclosed to the Lenders such as Bank of America.
Additional information is available through Bank of America Home Owner’s Assistance website. You can also contact us if you need further information about your Bank of America Short Sale.
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