When there is a direct relationship between any of the parties to a real estate transaction, (including borrower, client, employer, lender, broker, appraiser, seller or builder) the transaction will be considered non-arm’s length.

An Arm’s Length transaction would then be a transaction where all the parties involved are entirely independent of each other and have no reason for collusion.

Who would do that????

These transactions are not intended to bail out a family member or current owner from an existing delinquent mortgage. When there is an established relationship between the interested parties, then the Title Commitment may not evidence any Foreclosure Proceedings or notice of default.

Also most important is that the non-arm’s length transaction must be for the purchase of a PRIMARY RESIDENCE ONLY. This is a FNMA/Freddie Mac guideline so be careful if the purchase will be for a second home or investment property. I recently had this situation and I could not find any lender that would do the purchase as investment property.

Be careful out there…it’s a jungle.

I apologize for the Inconvenience,
Jeff McLaughlin

Diane Gerdes

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